New official figures have revealed a sharp and concerning rise in unemployment across Wales, with the number of people out of work approaching a significant threshold. The data also highlights the persistent challenge of economic inactivity, which remains far higher in Wales than the UK average.
Labour Market Weakness Hits Wales Hard
According to the Office for National Statistics (ONS), the unemployment rate in Wales for the period from August to October rose by 1.4% on the previous quarter to reach 6.1%. This represents approximately 94,000 people and is the highest rate seen since early 2021, and the highest outside the pandemic period since early 2016.
This Welsh rate is significantly higher than the UK-wide figure of 5.1%. Within the UK nations, only London reported a higher unemployment rate at 6.8%. In comparison, England stood at 5.2%, Scotland at 3.8%, and Northern Ireland at just 2.4%.
Alongside rising unemployment, the issue of economic inactivity – which covers people of working age who are not seeking employment – remains acute. In Wales, the rate was 24.5%, equating to 477,000 individuals. While this marked a slight decrease of 1.1% from the May-June period, it is still well above the UK average of 21%. Only Northern Ireland (27.5%) and the North East of England (25%) reported higher levels.
Political Reaction and UK-Wide Context
The figures prompted immediate political response. Conservative Member of the Senedd for Aberconwy, Janet Finch-Saunders, stated the data was unsurprising. She blamed UK Government tax policies for creating a "stagnant economy and rising unemployment, particularly here in Wales."
Finch-Saunders pointed to the two budgets delivered by Chancellor Rachel Reeves as a key risk factor. She outlined Welsh Conservative proposals to cut business rates and income tax, arguing such measures would "stimulate Wales’s struggling economy and help get people back into work."
The weakness in the Welsh labour market mirrors a broader UK trend. The ONS provisionally estimated that the number of employees on payrolls across the UK fell by 38,000 in November – the largest drop in five years – bringing the total to 30.3 million. Furthermore, the number of young people classified as Neets (not in employment, education, or training) has been climbing since 2021 and is now at its highest level since 2014.
Expert Analysis and Economic Outlook
ONS Director of Economic Statistics, Liz McKeown, summarised the UK position, noting: "The overall picture continues to be of a weakening labour market." She highlighted falling payroll numbers, subdued hiring, and a particular increase in unemployment among younger age groups.
Economists suggested that uncertainty in the run-up to the November 26 Budget weighed heavily on the jobs market. Rob Wood, chief UK economist at Pantheon Macroeconomics, commented: "Budget chaos has hit job growth in the past few months as firms seem to have delayed decision-making."
Sanjay Raja of Deutsche Bank Research described the signs as "worrying" as the economy heads towards Christmas. However, a silver lining for policymakers was a further easing in wage growth. Regular pay growth slowed to 4.6% in the three months to October, which was 0.9% higher after CPI inflation is accounted for. Experts believe this cooling could reinforce the case for the Bank of England to cut interest rates from 4% to 3.75% in its upcoming decision.
