{"id":738828,"date":"2026-02-03T05:08:11","date_gmt":"2026-02-03T05:08:11","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/738828\/"},"modified":"2026-02-03T05:08:11","modified_gmt":"2026-02-03T05:08:11","slug":"unemployment-is-on-the-rise-in-london-should-the-uk-be-worried","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/738828\/","title":{"rendered":"Unemployment is on the rise in London. Should the UK be worried?"},"content":{"rendered":"

At the national level,\u00a0the data suggests that\u00a0rising unemployment over the past year has largely been driven by people moving out of economic inactivity<\/a> \u2013 such as students or people with long-term health conditions \u2013 and starting to look for work again.\u00a0While in the short-term\u00a0it means the unemployment figures tick upwards,\u00a0such a shift\u00a0could provide an opportunity to support more of those previously outside of the labour market into sustained employment in the future.<\/p>\n

In London, however, the story appears different. Here, employment\u00a0seems\u00a0to be contracting at the same time as unemployment is rising. That combination potentially points to more\u00a0Londoners\u00a0actually losing their jobs. And when we look beyond the headline statistics, there are several\u00a0signals\u00a0policymakers should be paying close attention to as 2026 unfolds.<\/p>\n

Younger workers seem to be bearing the brunt of recent increases in unemployment<\/a>.\u00a0Given the scale and diversity of the London economy, it\u00a0should\u00a0be a fantastic place for a young person to begin and progress through the early part of their career. And yet for people aged 16 to 34,\u00a0it seems that finding\u00a0secure work\u00a0is becoming\u00a0more difficult, while the cost\u00a0of housing<\/a> and everyday essentials\u00a0continues\u00a0to rise. <\/p>\n

We know that spells of unemployment early in working life can have long-term scarring effects on earnings, wellbeing and career prospects\u00a0\u2013 so this recent rise\u00a0should concern anyone who cares about London\u2019s future workforce.<\/p>\n

Redundancies in the capital were also higher than the national average towards the end of 2025, suggesting some employers are already cutting back. And while London is often spoken about as a single labour market, conditions vary sharply between boroughs.\u00a0<\/p>\n

Analysis by the Work Foundation\u00a0shows that hiring has slowed noticeably in many outer London boroughs. This is\u00a0particularly\u00a0the case\u00a0in health, social care<\/a>\u00a0and retail\u00a0\u2013\u00a0sectors that\u00a0often\u00a0underpin local economies and provide employment for thousands of people. Where vacancy growth has been strongest, it has\u00a0in part\u00a0been concentrated in more precarious sectors such as hospitality, potentially reflecting short-term or insecure opportunities<\/a> rather than stable jobs people can build a life around.<\/p>\n

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There is also a wider context to consider. London\u2019s status as a global city\u00a0can make\u00a0it sensitive to international turbulence\u00a0\u2013\u00a0from weaker global demand to ongoing trade uncertainty.\u00a0And while the strength of the London economy has tended to make it more resilient to economic shocks than other parts of the country, there have been instances where the capital has felt the effects of economic slowdowns before other\u00a0regions.<\/p>\n

This all speaks to the complexity of London\u2019s labour market. The capital is home to global financial institutions, fast-growing tech firms and major arms of government \u2013 but it also contains stubborn pockets of deprivation<\/a>, in-work poverty and insecure employment.<\/p>\n

Ultimately, we need to see how these indicators shift over the coming months before drawing firm conclusions. But what\u2019s already clear is that the\u00a0government\u00a0cannot afford complacency in 2026. Unemployment has been creeping up nationally for over a year, and a weakening jobs market in London\u00a0would have\u00a0national implications.<\/p>\n

Recently launched\u00a0local\u00a0Trailblazer programmes<\/a> to boost\u00a0employment and\u00a0strengthen\u00a0pathways to work for young people across the\u00a0capital\u00a0offer\u00a0the opportunity to\u00a0address\u00a0some of\u00a0these concerns, providing they continue to receive investment and support\u00a0throughout 2026 and beyond.<\/p>\n

And more broadly,\u00a0ministers\u00a0must continue to back\u00a0the Mayor of London<\/a> and\u00a0other\u00a0local leaders\u00a0as they work together with employers\u00a0to\u00a0support sustainable growth and expand access to secure, flexible work\u00a0in the\u00a0capital\u00a0\u2013\u00a0ensuring that\u00a0opportunities\u00a0reach every community,\u00a0not just those already doing well.<\/p>\n

Ben Harrison is director of\u00a0Work Foundation<\/a>\u00a0at Lancaster University.<\/strong><\/p>\n

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