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Rising youth unemployment remains a key worry for the government, which has made tackling the cost of living central to its agenda.
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Boost for Andy Burnham as UK jobless rate drops before October 28 budget
Oct 20, 2026
- UK unemployment falls unexpectedly to 4.7 per cent
- Analysts had forecast the rate would stay at 4.9 per cent
- Around one million young people not in work, education or training
- Chancellor John Healey to deliver budget on October 28
UK UNEMPLOYMENT fell unexpectedly to 4.7 per cent in the three months to the end of August, official figures showed on Tuesday, a boost for the government ahead of next week’s budget.
The rate, down from 4.9 per cent in the three months to July, is the lowest since mid-2025, the Office for National Statistics said. Analysts had expected it to remain unchanged.
The figures are welcome news for prime minister Andy Burnham, who has warned of difficult decisions in Chancellor John Healey’s budget on October 28.
Healey gets pre-budget boost as economy beats forecasts
“Signs that the labour market may be stabilising are welcome, but the recovery remains fragile and the government will not want to do anything that further discourages businesses from hiring,” said Richard Carter, head of fixed interest research at Quilter Cheviot.
Youth unemployment concern
Rising youth unemployment remains a key worry for the government, which has made tackling the cost of living central to its agenda.
Around one million 16- to 24-year-olds are not in employment, education or training. Burnham warned on Sunday that this amounted to an “economic catastrophe and moral failure”.
“We either invest in the success of our young people or pay for failure through the benefits system,” he wrote in The Times.
UK rents hit record £1,418 outside London as rental market shows signs of cooling
Burnham has promised a “clear guarantee of support” for young people and “big changes” to the welfare system. A government-commissioned review of youth unemployment, led by former Labour cabinet minister Alan Milburn, is due to report next month.
On Monday, the government set out plans to recruit thousands more apprentices under 25 in sectors including accounting, law and consulting.
Budget pressures
With inflation rising and government borrowing costs at multi-decade highs, Healey has pledged to maintain strict fiscal discipline.
(With inputs from agencies)
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