Unemployment in the UK rose to 5.2% in the last quarter of 2025, marking the highest level since January 2021. Experts attribute the deterioration of the labor market to three main factors: increased employer contributions in 2024, the rise in the minimum wage, and the impact of the Employment Rights Act, which expanded worker protections but is said to have slowed hiring. With inflation at 3.4%, the country remains above the Bank of England’s 2% target. Faced with stagnant growth, Prime Minister Keir Starmer’s government confronts the challenge of reviving the economy while the private sector absorbs new fiscal and regulatory adjustments.
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