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In 2026, the annual unemployment rate of the United Kingdom is expected to reach *** percent, compared with *** percent in 2025. After peaking in 2026, unemployment is anticipated to fall to *** percent in 2027 and *** percent by 2030. Earlier forecasts underestimated how high unemployment would be in 2026, with a rate of *** percent predicted in March 2025, which was revised upward toÌý*** percent in November and finally to *** percent in March 2026.

Uptick in unemployment after falling to historic lows

A common indicator of an economy’s relative health, the unemployment rate in the UK generally fell throughout most of the 2010s, after reaching *** percent in late 2011. After a sudden increase in unemployment during the COVID-19 pandemic, there was a steep decline that lasted until August 2022, when the unemployment rate was just *** percent. There was then a rise in unemployment from 2023 onwards, which continued throughout 2024 and 2025. This has been matched by a fall in UK job vacancies, which peaked at *** million in May 2022 but has been falling in most months since then, with approximately ** vacancies at the start of 2026.

Revisions to GDP and inflation expectations for 2026

Since the global financial crisis of the late 2000s, and especially since the COVID-19 pandemic, the UK's economic growth has been poor, with the UK alternating between weak growth and slight contractions. For 2026, the UK economy is set to grow by just ***Ìýpercent, a downgrade from earlier projections.ÌýInflation, which skyrocketed from late 2021 onwards, reached a peak of **** percent in October 2022 and, though down to more usual levels by 2024, accelerated in 2025, reaching a rate of ***Ìýpercent in the third quarter of 2025.Ìý