Young people in UK hit by ‘low-gear economy’, warns Bank of England deputy

Bank of England deputy governor Clare Lombardelli says young people are bearing the cost of a “low-gear economy”, as employers delay recruitment amid uncertainty linked to the Iran conflict. She warned that the war’s impact on energy prices and the economic outlook is contributing to rising youth unemployment, with people entering the labour market especially exposed.

UK unemployment has risen to 4.7% this year, while youth unemployment is at its highest level outside the Covid pandemic since 2015. Employers are holding on to existing staff but hiring less, as they face higher costs, taxes and subdued consumer demand; nearly a million young people are not in education, employment or training. Lombardelli also said a further interest rate rise could be possible in December, depending on the conflict, energy prices and wider economic data.