Unemployment among young people in London has reached its highest level in nearly a decade, according to official labour market statistics. Data covering the 12 months to September reveal that the unemployment rate for 16 to 24-year-olds in the capital has risen to 18.6%, the highest figure observed since 2015, excluding the Covid-19 pandemic period.
This increase represents a rise of 11,000 unemployed young people over the previous year, taking the total to 88,000. The figures raise concerns over the prospects for young Londoners and highlight wider economic challenges facing the city.
Youth unemployment rates in London surge
The most recent data show a substantial rise in youth unemployment in London. On average, 88,000 individuals aged 16 to 24 were unemployed in the year to September, representing an increase of 11,000 on the previous year.
The unemployment rate in this age group now stands at 18.6%, the highest level recorded in nine years when it previously reached 19.4%, discounting figures during the Covid-19 pandemic.
This increase follows a period when the rate had remained relatively stable. Analysts have expressed concern that the trend may reflect growing barriers for young entrants into the labour market, including fewer entry-level opportunities and increased competition for available positions.
Decline in employment among young Londoners
Concurrently, the number of young Londoners in employment fell noticeably over the same 12-month period. The employment figure for 16 to 24-year-olds dropped from 400,000 to 383,000, a decline of 17,000 or approximately 4.25%.
The number of economically active young people in this group stood at 471,000, encompassing those employed, seeking work, or preparing to start employment. A further 465,000 individuals in this age bracket are now classified as economically inactive, meaning they are not currently seeking work or unable to begin employment within two weeks.
Commentators suggest that factors such as reduced job vacancies following the pandemic and challenges in accessing stable roles contribute to this situation.
Broader employment trends across age groups
While youth unemployment has seen the sharpest increase, employment figures have fallen across other working-age groups in London. The 25 to 34 age group experienced a decline of 15,000 positions, from 1,404,000 to 1,389,000, reflecting a 1.07% drop.
The number of employed Londoners aged 35 to 49 fell by 59,000, from 1,804,000 to 1,745,000, a 3.27% decrease. Conversely, employment among Londoners aged over 50 has increased.
This trend is believed to be influenced in part by more women entering the workforce, attributed to State pension reforms prompting later retirement.
Political reaction and policy responses
The rise in youth unemployment has prompted political debate. Shadow Chancellor Sir Mel Stride criticised government policies, asserting, 'When you tax work, jobs disappear.'
He further argued that current economic strategies result in fewer opportunities and risk leaving a generation behind. Work and Pensions Secretary Pat McFadden cited national employment figures indicating that 513,000 more people are in work compared to the previous year, underscoring ongoing efforts to address youth unemployment.
He stated: 'We are investing £1.5 billion to get hundreds of thousands of young people earning or learning, with former Health Secretary Alan Milburn leading a review to tackle obstacles facing younger generations.' McFadden highlighted the upcoming launch of a Jobs Guarantee scheme, aiming to create paid work placements with participation from major employers.
Local political candidates have also commented on the situation. Dylan Law, Green Party Deputy Mayoral candidate in Hackney, stressed the difficulties facing young people, stating that entry-level jobs often require excessive experience while failing to offer adequate pay.
Sector-specific job losses in the capital
London’s rising unemployment has not been confined to young people alone, nor to a single sector. In the twelve months to September, the capital’s overall unemployment rate rose to 7.2%, the highest for any region in the UK. The retail sector lost 14,000 jobs, with additional losses recorded in hospitality (4,000), arts and entertainment (12,000), and construction (30,000).
Office administration and support services experienced one of the most significant reductions, with 43,000 posts cut. The financial and insurance sectors saw a fall of 3,000 jobs, contributing to employment challenges in the City.
The transport and storage sector lost 31,000 roles, while manufacturing positions fell by 14,000. These widespread losses are attributed to a combination of structural economic changes, including the adoption of new technologies and ongoing impacts from the post-pandemic recovery.
Final Summary
London faces its highest rate of youth unemployment in nearly a decade, with 88,000 16 to 24-year-olds out of work and employment numbers falling across several age groups.
The crisis is most acute among the capital’s youngest workers, against a backdrop of significant job losses in retail, hospitality, construction, and office administration. Politicians and employers are debating the causes and responses, with government initiatives underway to encourage youth employment and improve pathways into stable work.
The issue underscores the need for continued scrutiny of labour market trends and public policy, a task for which tools like the Pie app can provide valuable insights.
