Bank of England Warns of Youth Unemployment Crisis
Clare Lombardelli warns that a low-gear economy is driving UK youth unemployment to its highest levels since 2015.
Bank of England Deputy Governor Clare Lombardelli warned that young people in the United Kingdom are suffering from a "low-gear economy" defined by a "low hire, low fire dynamic." She stated that geopolitical uncertainty and rising energy prices linked to the conflict in Iran have led employers to freeze recruitment and delay new hires.
This trend has pushed youth unemployment to its highest levels since 2015, excluding the pandemic era, leaving nearly one million young people not in education, employment, or training. While overall UK unemployment has risen to 4.7%, Lombardelli noted the impact is most severe within the retail and hospitality sectors.
The Bank of England recently increased the base interest rate to 4%. Lombardelli indicated the bank is considering another rate hike in December, though the decision depends on the resolution of the Iran conflict and the trajectory of energy prices.
