Data released yesterday (Tuesday 17 February) by the Office For National Statistics (ONS) revealed unemployment levels in the UK rose to the highest rate for almost five years at the end of 2025.
According to the figures, the rate climbed to 5.2% in the three months to December, from 5.1% in the three months to November. Those aged between 16 and 24 were particularly impacted, with 16.1% unemployed, the highest number in more than 10 years.
Wages were also affected, with the rate at which they are growing continuing to slow. Average pay grew by 4.2%, down from a revised 4.4% in the three months to November.
Commenting on the data, UKHospitality (UKH) CEO Allen Simpson said: “These figures underline the growing strain on the UK jobs market, with unemployment rising and payroll employment continuing to fall.
Vital opportunities
“Sadly, younger workers and entry level roles are bearing the brunt of this slowdown, with employment among under 35s down sharply since mid 2024.”
He continued: “Hospitality is a vital entry point into work for young people, but rising costs and policy decisions – including changes to employer National Insurance, costing the sector £3.4bn a year – are making it harder for businesses to create, sustain and recruit into these roles.
“Without urgent action to ease the pressure on employers, we risk locking a generation out of vital opportunities to gain skills, experience and a foothold in the workforce.
“If the Government is serious about growth and tackling youth unemployment, it must urgently ease the pressure on hospitality businesses and stop taxing jobs out of the economy.”
Following the update from ONS, the Government is also reported to be considering scrapping its manifesto pledge to pay young people the same NMW as older workers amid warnings the cost of labour is contributing to record youth employment, according to a report in The Times.
Writing on X yesterday, UKH chair Kate Nicholls said: “The final quarter of the year is usually hospitality and retail’s golden quarter so the fact that jobs are being shed not created and unemployment continues to rise is a measure of the challenges faced by our businesses as a result of Government imposed tax hikes and policy decisions.”
Right conditions
She added: “The vice like grip of tax, regulation and inflation is squeezing hospitality’s ability to provide opportunities for all - we know we can do it is the conditions are right.”
Last month’s Labour Market Data report from ONS showed almost 9,000 jobs in the hospitality industry were lost in December 2025.
The figures estimated the sector employed 8,784 fewer people in December compared with November, despite the period traditionally being a peak recruitment window for the festive season.
At the end of last year, operators from across the sector also told The Morning Advertiser (The MA) the increases to the National Living Wage (NLW) and National Minimum Wage (NMW) risked discouraging pubs from employing young people, warning this would result in more job losses.
British Beer & Pub Association (BBPA) CEO Emma McClarkin told The MA: “As a sector we’ve a long history of giving many people their first step on the career ladder, and pride ourselves on nurturing skills and confidence in workers.
“We know the Government value the people behind the pint, which is why we want to work with them to create optimal conditions for our sector to carry on investing in people.”
