UK unemployment rate hits highest in over 10 years

Britain’s unemployment rate edged up late 2025 to its highest in over a decade outside the pandemic period and wage growth slowed further, data showed on Tuesday, February 17, 2026.

The Office for National Statistics (ONS) announced on Tuesday that the unemployment rate rose to 5.2% in the last three months of 2025, the highest since 2015 not including the pandemic.

The jobless rate hit 5.3% in late 2020 and stood at 5.1% in the three months to November 2025.

The unemployment rate is calculated from a survey that the ONS is in the process of overhauling after response rates dipped too low during the pandemic. However, analysts say the quality of the data has improved in recent months.

Sterling fell by more than half a cent against the dollar after the figures were published.

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“Today’s data raises the prospect of the Bank of England resuming cutting interest rates in March,” the chief economist at KPMG UK, Yael Selfin, said.

Investors priced a roughly 73% chance of a quarter-point rate cut on March 19 at the BoE’s next meeting, up from 65% on Monday.

The data from the ONS showed weaker inflationary heat from growth in workers’ earnings.

Annual wage growth, excluding bonuses, slowed to 4.2% in the last three months of 2025 compared with the same period a year earlier, matching forecasts by most economists in a Reuters poll and down from 4.4% in the three months to November.

The BoE is watching pay as a gauge of how long Britain’s above-target inflation is likely to last.

The Star