Why is unemployment at its highest rate for a decade?

Unemployment hit 5.1 per cent in October - the highest rate for a decade, excluding coronavirus lockdowns - according to the latest figures from the Office for National Statistics. At the same time, the employment rate was unchanged from a year ago, at 74.9 per cent.

- JOHN RENTOUL

One way of resolving the apparent contradiction is that the ONS estimates that 21 per cent of the working-age population is economically inactive – that is, students, people on incapacity benefit, and others not looking for work. This figure has fallen from 21.8 per cent a year ago, but this only throws up another puzzle, given recent coverage of the rising number of young people who are Neets: not in education, employment or training.

What is happening with Neets?

The government is so worried about them that Alan Milburn, the former cabinet minister who is also advising Wes Streeting on NHS reform, has been appointed to review “soaring” rates of unemployment for young people. The unemployment rate for young people aged 16 to 24 is three times higher than that for workers of all ages, at 15.3 per cent in September, up from 14.8 per cent from the year before.