UK unemployment rate to hit 5 per cent next year, EY predicts

The UK's unemployment rate is predicted to hit five per cent.

The UK’s unemployment rate is set to rise to five per cent in the beginning of next year before falling back, a leading forecaster has said.

In its latest update on forecasts for UK growth, EY ITEM Club has suggested that the UK jobs market is set to see a further decline in the next few months.

The unemployment rate has crept up from 4.4 per cent to 4.8 per cent in the last 12 months.

Employers have said in various business surveys that the Chancellor’s £25bn hike to national insurance contributions (NICs) has cooled hiring levels and forced companies to cut payroll costs by making more staff redundant.

EY’s economist Matt Swannell has predicted that unemployment will continue to rise until the middle of next year befo