But while most leading economies have since recovered, the UK still has about 400,000 more people not working than in December 2019. A House of Lords report from December 2022 highlighted reasons including an increase in early retirement and rising levels of sickness.
The most common form of unemployment that affects the UK is cyclical unemployment. This occurs when there is an economic downturn such as a recession. As there is reduced demand for goods and services, firms do not require as many workers to fulfil customer demands and so people are laid off.
The ONS analysis of people who were economically inactive due to long-term sickness found that many had already left the workforce for another reason, such as looking after the family or home, or retiring, but had recently switched to reporting long-term sickness as the main reason for their inactivity.
The UK unemployment rate was estimated at 3.7%, 0.1 percentage points higher than the previous three-month period and 0.2 percentage points below pre-coronavirus levels.
Overall, Britain is facing a labour shortage of around 1.3 million workers, with certain industries feeling the deficit more than others. At the end of July there were roughly 180,000 unfilled vacancies in the hospitality sector, having risen by a third on this time last year.
The decrease in immigration to the UK after Brexit has also had an impact on labour supply. In fact, according to research published in January 2023, it has led to a shortage of around 330,000 workers in Britain.
Much of the rise in economic inactivity has been driven by older workers leaving the labour market. The latest figures show there has been a 9.5% increase in people aged 50-64 who are economically inactive, up to 3.5 million, and there are 635,000 fewer over 50s in the labour market since the pandemic started.
Australia Jobless Rate Unchanged at 3.5%
The number of unemployed individuals fell by 10.9 thousand to 504.4 thousand, with those seeking full-time jobs declining by 22.1 thousand to 328 thousand while those looking for part-time jobs increased by 11.3 thousand to 176.4 thousand.
In the three months to March 2023, the unemployment rate in the United Kingdom was highest in Wales where it was 4.6 percent, followed by four percent in England, 3.1 percent in Scotland, and 2.5 percent in Northern Ireland, the lowest rate among the four countries of the UK.
Approximately 11.4 percent of people aged 16 to 24 were unemployed in the United Kingdom in May 2023, the highest of any age group.
Business leaders say political and economic instability, Brexit, high inflation and rising interest rates are deterring firms from investing in Britain.
UK GDP is estimated to have fallen by 0.1% in May 2023
Over the broader three-month period to the end of May, the economy showed no growth as activity in the UK's dominant service sector flatlined. Construction rose by 0.2% while production – which includes manufacturing, energy production and mining – grew by 0.4%.
UK's slide in terms of overall GDP
This has gradually come down to sixth by 2021, the latest period for which World Bank (WB) data is available. Using WB data to calculate the UK's share in global GDP also shows a fall, with the number coming down from 5.3% in 1960 to just 3.2% in 2021.
There are many causes of unemployment in Australia, however it is most often a result of cyclical or structural unemployment that hinder an individual's ability to find a job based on their skills or the current economic situation.
Across all ethnic backgrounds, unemployment rates are higher for young people than for older age groups. Among people aged 16-24, unemployment rates were highest for people from a Bangladeshi or Pakistani (20%) or a Black (19%) ethnic background in January-December 2022.
Analysts said the UK was suffering a chronic shortage of workers after about 500,000 quit the labour market during the Covid-19 pandemic and many continental European workers left Britain following Brexit. The unemployment rate fell to 3.7%, the lowest since 1974.
Among European Union countries in April 2023, Spain had the highest unemployment rate at 12.7 percent, followed by Greece at 11.2 percent. By contrast, Czechia has the lowest unemployment rate in Europe, at 2.7 percent.
Unemployment rate forecast - Country rankings
The average for 2023 based on 101 countries was 7.12 percent. The highest value was in South Africa: 34.72 percent and the lowest value was in Thailand: 1 percent. The indicator is available from 1980 to 2028.
The countries that have the lowest unemployment rates are Qatar, Cambodia, and Niger. Just because a country has a low unemployment rate, does not mean its citizens are necessarily well-off. That is determined by GDP per capita.
In May 2023, Tasmania had the highest unemployment rate among all states and territories in Australia with approximately 4.2 percent of those eligible to work jobs not in employment. Queensland had the second highest unemployment rate of 3.9 percent.
Labour Force, Australia
unemployment rate remained at 3.5%. participation rate remained at 66.8%. employment increased to 14,045,800.
Key statistics
unemployment rate remained at 3.5%. participation rate remained at 66.8%. employment increased to 14,045,800. employment to population ratio remained at 64.5%.
Increased crime rates and anti-social behavior in nearly all towns in the UK is a worry for many and often a reason that many are now looking for a safer life abroad. In many cities throughout the UK, gang culture has increased with more knife and gun crimes been committed than ever before.
From October 2021 to September 2022, 137,700 more 50-to-64-year-olds gave short- or long-term illness as the main reason for not working and not looking for work, compared with April 2019 to March 2020. 154,400 more people cited retirement as the main reason for not being in work and not looking for work.
Unemployment is still historically low; vacancies are above pre-Covid levels; and redundancies are at similar levels to pre-pandemic. The big picture is that we have a tight labour market, but with early warning signs for trouble ahead.