UK Unemployment Rate Holds at 4.7% in June 2025, Highest Since 2021

The UK unemployment rate stood at 4.7% in the three months to June 2025, unchanged from the previous period and in line with market forecasts. This marks the highest jobless rate since the three months ending July 2021, signalling ongoing challenges in the labour market despite record gains in full-time employment.

According to the Office for National Statistics (ONS), the increase in long-term unemployment is particularly notable. The number of people unemployed for between 6 and 12 months and for over 12 months rose compared to the prior period. On an annual basis, unemployment increased across all durations, up to 6 months, between 6 and 12 months, and over 12 months.

📉 Long-Term Joblessness on the Rise

While the overall UK unemployment rate has stabilised, the composition of joblessness is shifting. A higher proportion of unemployed individuals are now out of work for extended periods, which economists warn can have lasting effects on skills, wages, and economic participation.

Meanwhile, the economic inactivity rate (the share of people neither working nor seeking work) remained unchanged at 21%, suggesting that workforce participation has plateaued.

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📈 Employment Reaches New Highs

In contrast to rising unemployment, the total number of employed people in the UK rose by 238,000 to 34.21 million, the highest level since September 2024. This growth was driven primarily by full-time job gains, indicating a shift towards more stable employment contracts.

The number of people holding second jobs also increased, now accounting for 3.9% of all employed individuals, a sign that cost-of-living pressures may still be influencing household income strategies.

📊 UK Labour Market Snapshot – June 2025

✅ Key Takeaways

• UK unemployment rate remains at 4.7%, the highest since mid-2021.
• Long-term unemployment (6+ months) continues to rise.
• Employment hits a record 34.21 million, led by full-time roles.
• Economic inactivity rate remains at 21%, showing stagnant participation.
• More workers are taking on second jobs, now nearly 4% of the workforce.

💬 What This Means Going Forward

The persistence of the UK unemployment rate at its highest level in four years signals a mixed labour market, with job creation at record highs, yet more people facing prolonged unemployment. Analysts suggest that while robust hiring is positive, policymakers may need targeted measures to address the structural factors keeping some people out of work for longer periods.

The coming months will reveal whether rising full-time job numbers can offset the risks of entrenched long-term unemployment, a key metric to watch as the UK navigates both domestic and global economic pressures.

Your turn: What do you think the government should prioritise, boosting job creation or tackling long-term unemployment?

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