UK unemployment is expected to climb to its highest level in more than a decade in 2026, as economists warn that weak growth, rising employment costs and subdued private sector confidence continue to weigh on the labour market.
According to The Times’ annual Economists Survey of 48 leading economists, more than two-thirds believe the unemployment rate will end 2026 between 5% and 5.5%, up from its current level of 5.1%. If the upper end of that range is reached, it would mark the highest jobless rate since 2015.
The survey paints a downbeat picture of an economy increasingly reliant on government spending, with private sector hiring constrained by higher taxes, rising wages and ongoing uncertainty following the Chancellor’s autumn Budget.
Economists point to Rachel Reeves’s £25bn increase in employer National Insurance contributions, alongside higher minimum wages and forthcoming changes under the Employment Rights Bill, as key drags on hiring intentions.
Support authors and subscribe to content
This is premium stuff. Subscribe to read the entire article.
