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October 2018

The labour market figures published on 16 October suggest an unwelcome outlook for the UK labour market as we head towards Brexit. Claimant unemployment is on course to hit 1 million by the time we exit the EU in March 2019.

Download the full analysis for October 2018.

  • Unemployment is 1,363,000, up by 2,000 from last month’s published figure (quarterly headline down by 47,000) and the unemployment rate is 4.0%, no change on last month and reduced by 0.1 percentage points on last quarter.
  • The ONS figure for claimant unemployed is 942,900, and rose by 18,500 on last month. The claimant rate is 2.6%.
  • The number of workless young people (not in employment, full-time education or training) is 960,000, and has fallen by 43,000 on the quarter, now representing 13.7% of the youth population (down by 0.6 percentage points).
  • Youth unemployment (including students) is 464,000. It fell by 60,000 on the quarter.
  • There are 1.6 unemployed people per vacancy. Learning and Work Institute estimates this figure may rise next month.
  • The employment rate is 75.5% and (was stable at the same as last month and down by 0.1 percentage points in the preferred quarterly measure).

Duncan Melville, Chief Economist at Learning and Work Institute, commented:

"We expect that the coming months will see a turn in the labour market with employment falling and unemployment rising as we head out of the EU.
The level of unemployment fell in the quarter to June - August 2018, the seventh consecutive quarterly fall in a row, but before you get too excited by this apparent good news consider some other facts.
Unemployment has been around 1.36 million since the April - June quarter, so it appears that unemployment has stopped falling. Even the quarterly fall recorded today has occurred not because of rising employment, which fell by 5,000 in quarter, but because economic inactivity is rising amongst people of working age.
Inactivity is up by more than 100,000 in the quarter for the second month in a row."

Read more.

Paul Bivand, Learning and Work Institute's associate director for statistics and analysis said:

"The claimant count of unemployed benefit claimants rose sharply again this month, while survey unemployment was flat. If the rise was just due to Universal Credit counting as unemployed people the old benefits counted as inactive, such as people signed off work by a doctor and who are ineligible for employer sick pay, then we would expect the rise to be a step-change, stopping when the roll-out for new claimants completed. There is no sign yet of that."

Chart 1: UK unemployment (ILO)

The latest unemployment figure is 1,363,000. It rose by 3,000 from the figure published last month. On the basis of later claimant count figures, Learning and Work Institute estimates that unemployment may rise, although this remains highly uncertain. The unemployment rate remained at 4.0%.

Chart 8: Jobseeker’s Allowance and Universal Credit claimant count

The ONS headline Jobseeker’s Allowance and Universal Credit claimant count rose by 18,500 in September, taking the total to 942,900. ONS' claimant count before seasonal adjustment is up by 12,000 to 932,800. This unadjusted national change is directly comparable to the local level claimant count changes published today.

Learning and Work Institute's seasonally adjusted estimate increased by 19,300 to 947,700.

Chart 15: UK employment

Employment fell by 3,000 on the figure published last month, to 32,394,000.

Chart 17: Claimants for inactive benefits and the economically inactive – inactivity benefits

The number of people inactive owing to long-term sickness fell this month, but is up 30,000 over the quarter. The latest benefit figures are for February, and exclude Universal Credit claimants.

This chart shows claimants of Employment and Support Allowance, and Incapacity Benefit (the orange dots), compared with survey figures for the economically inactive owing to long-term sickness.