The UK’s unemployment rate for 18–24-year-olds stood at 13.7 per cent in the three months to November, up from 10.2 per cent three years earlier. That marks the highest level for the cohort since late 2020
A sharp rise in Britain’s minimum wage for younger workers over the past three years has contributed to higher unemployment among that age group, Catherine Mann, a member of the Monetary Policy Committee at the Bank of England, said on Sunday.
In an interview with the Sunday Telegraph, Mann said that the jump in joblessness among youth reflects sizeable increases in statutory pay floors for younger workers, rather than signalling a broader deterioration in the labour market.
Official data show the unemployment rate for 18–24-year-olds stood at 13.7 per cent in the three months to November, up from 10.2 per cent three years earlier. That marks the highest level for the cohort since late 2020. By comparison, the overall unemployment rate has risen more modestly over the same period, to 5.1 per cent from 3.9 per cent.
Mann cautioned against reading youth unemployment as an early warning sign of a wider downturn. Instead, she suggested that the cumulative impact of faster minimum wage increases for younger workers has begun to show up in hiring patterns.
“I think we have to be very careful in the storyline about youth unemployment being the canary in the coal mine for a deeper deterioration in the labour market,” she said.
Over the past three years, the minimum wage for 21–22-year-olds has climbed by around 33 per cent, aligning it with the £12.71 per hour National Living Wage paid to older workers. For those aged 18–20, the statutory rate has jumped 46 per cent to £10 an hour. The UK government has signalled its intention to eventually bring the 18–20 age band fully in line with the National Living Wage.
Mann described the rise in youth unemployment as “unfortunate” but said the relationship with higher mandated pay was evident in the data.
“The accumulation over three years of the rise in the National Living Wage for that group has been manifested in unemployment for that category of workers. Very unfortunate, but it is true. It is a fact,” she added.
A former chief economist at the Paris-based Organisation for Economic Co-operation and Development, Mann has consistently taken a hawkish stance on inflation. She voted against the central bank’s last three interest rate cuts, citing concerns that price pressures remain sticky.
With inputs from agencies.
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