North East regains unwanted title of having UK's highest unemployment

The North East has regained its unwanted title of having the highest unemployment rate in the country in figures released today.

Statistics released by the Office for National Statistics show that the region’s unemployment rate rose significantly to 5.6% in the three months from May to June. That rise was partially offset by a drop in the number of people classed as economically inactive in the region, but the North East still has the lowest proportion of people in work in the UK.

The official statistics agency has warned changes in the way it measures the UK’s labour force mean current figures are volatile and should be treated with caution. But the big rise in the number of North East people out of work will be concerning both locally and nationally.

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The North East has historically had some of the highest unemployment in the country but figures fell between 2021 and 2023 and at one point came in below the national average. But the region has had the largest fall in the employment rate over the last year, down 3.9 percentage points compared with estimates a year ago.

The big rise in North East unemployment has come at the same time as a fall nationally.

Marianne O’Sullivan, policy manager at the North East Chamber of Commerce, said: “The ONS is still undergoing new ways of measuring employment and has warned against being too reactive to these figures. It’s more important than ever to take a forward-looking approach of what can be done to improve our region’s labour market, rather than focus on what the official figures suggest.

“We know that high rates of economic inactivity are a key issue for the north where around one in four of our workforce is economically inactive, often as a result of ill health or caring responsibilities. The Chamber’s submission to the Government’s autumn Budget consultation highlights the need for health-related tax incentives for SMEs, which would enable them to provide access to additional healthcare and better occupational health support for their staff.”

Business Secretary Jonathan Reynolds said he was “really concerned” by the unemployment figures. He said: “I am really concerned by the state of the labour market, by the rise of people not working after the pandemic… the reason we want to revive the NHS, get people back to work that benefits the economy, the economy produces the revenue to pay for a better NHS.”