Annual unemployment rate in the UK 2000-2028

In 2023, the annual unemployment rate of the United Kingdom is expected to be 4.2 percent, compared with 3.7 percent in 2022. Unemployment is expected to rise to 4.6 percent in 2024 and 2025, before gradually falling to 4.1 percent by 2028. A common indicator of an economy’s relative health, the unemployment rate has generally been falling in the United Kingdom since it’s 2011 peak of 8.1 percent.

Uptick in unemployment in 2023

In the aftermath of the COVID-19 pandemic the unemployment rate in the United Kingdom grew steadily, from just 3.9 percent at the start of 2020, to 5.1 percent by the end of the year. This was followed by a steep decline in unemployment that lasted until August 2022, when the unemployment rate was just 3.5 percent. Since that point, unemployment has steadily grown in the UK, and was 4.3 percent as of July 2023. Rising unemployment has also been matched by a fall in the number of UK job vacancies, which reached a peak of 1.3 million in May 2022, but has been falling in every subsequent month, with approximately 957,000 vacancies in October 2023.

Other UK key economic indicators

Although the economic damage of COVID-19 to the UK's labor market was contained somewhat, the overall economy suffered in some key areas. The initial lockdown measures resulted in a huge fall to UK GDP, in April 2020 which took over a year to reach its pre-pandemic size. Economic growth has remained sluggish ever since the initial recovery, with the UK economy alternating between weak growth and slight contractions. Inflation also skyrocketed from late 2021 onwards, reaching a peak of 11.1 percent in October 2022. Even on year after that peak, inflation has proven stubborn to get down, with a rate of 4.6 percent in October 2023.