Labour market statistics: May 2026 + reactions

UK Labour Market May 2026

Secretary of State for Work and Pensions, Pat McFadden, said: 

"Today's figures show there were 416,000 more people in work than there was this time last year. While this is encouraging, we know the conflict in the Middle East is casting a shadow on the labour market.

“However, thanks to the choices we have made, we are in a stronger position to deal with the continuing volatility and costs of the war in Iran with our economy ranking as the fastest growing of any European G7 country last year.

“Boosting opportunity and tackling youth unemployment in every area remains our priority, and through our Jobs Guarantee we are helping young people into work, while engaging employers to ensure they have the skilled workforce that they need.” 

Background:

• The employment rate is up 0.1% on the quarter to 75% (unchanged on the month).
• The unemployment rate is down (0.2%) on the quarter to 5.0% (up 0.1%% on the month).
• The economic inactivity rate is up (0.1%) on the quarter to 20.9% (unchanged on the month).
• The UK is the fastest growing economy in the G7 so far this year and last year, we were the fastest growing European G7 economy. 
• The IMF also expects the UK's deficit to fall in every year between 2025 and 2031, falling to the joint-lowest level (with Canada) in the G7 by 2029 - showing we have the right economic plan.   
• To back young talent, businesses that employ anyone under the age of 21 benefit from relief on National Insurance contributions, and the Treasury has confirmed this support will continue for a further year.
• Young people across the United Kingdom are set to benefit after McDonald's becomes the latest major employer to support the Government's Youth Guarantee and launches the biggest work experience programme in the country
• Our £3.5 billion investment will help disabled people and those with long-term health conditions move closer to the labour market, offering personalised support aimed at improving employment and living standards.
• We recently introduced Right to Try to allow claimants on sickness and disability benefits the right to try work without the immediate fear of losing their benefits.
• We've rebalanced Universal Credit to tackle the perverse incentives that discourage work, while redeploying 1,000 work coaches to support thousands of sick and disabled people who were previously left without contact for year. 

Conservatives

Helen Whately MP, Shadow Work and Pensions Secretary, said:

“Turns out last month's improvement in unemployment figures was just a blip. The Government has now returned the country to the same negative trend they've driven since the came into power with unemployment rising month after month. They can change their leader but it's still the same old Labour Party.

“This is further proof Labour have utterly failed in government. Labour came to office without a plan and are now in open civil war while the country cries out for serious leadership.

“Only the Conservatives are offering a serious alternative that backs work, rewards ambition, and gets Britain working again.”

Andrew Griffith MP, Shadow Business Secretary, said:

“These figures confirm what businesses have been warning for months. Labour's job destroying legislation and employment tax rises are piling costs onto employers and workers are paying the price.

“Only the Conservatives have a plan to Get Britian Working again.”

ENDS

Notes to Editors:

Office for National Statistics (ONS) figures show unemployment is rising:

• The unemployment rate rose to 5 per cent, higher than the time of the General Election. In the period January 2026 to March 2026, unemployment hit 5.0 per cent, which is up from 4.2 per cent at the time of the General Election. Additionally, the November 2025 Economic and Fiscal Outlook raised the forecast unemployment rate for each year from 2026 through 2029 (ONS, Labour Market Statistics, 19 May 2026, link).

Labour's choices have increased unemployment:

• Despite pledging to ‘not increase taxes on working people', Labour have hiked taxes by £60 billion, pushing the tax burden to a record high. The Labour Party Manifesto for the 2024 General Election said: ‘Labour will not increase taxes on working people'. However, Labour's first two Budgets have increased taxes by £36 billion and £26 billion respectively, pushing the tax burden to a historic high of 38.3 per cent of GDP (The Labour Party, Change, 13 June 2024, link; OBR, Economic and Fiscal Outlook, 26 November 2025, link).

• Rachel Reeves introduced a Jobs Tax – a tax hike that will cost employers £900 per employee each year. The IFS has warned that Labour's Jobs Tax that will increase the cost of employment by £900 for the average worker (IFS, Autumn Budget 2024, 31 October 2024, link).

Only the Conservatives have a plan to make work pay:

• We will break Labour's doom loop with our Golden Economic Rule and plan to save £47 billion.Under our Golden Economic Rule, for every pound saved, at least half will go to cutting the deficit, with the remainder being used to get our economy moving.

• We will cut tax – backing business and making work pay. At Conservative Party Conference, we announced our plan to:

• Abolish Stamp Duty on primary residences, helping more families achieve the dream of home ownership. Under our plan, Stamp Duty Land Tax, which is paid when you buy a property or land in England and Northern Ireland, will be abolished for primary residences.

• Abolish Business Rates for Retail, Hospitality and Leisure businesses, benefitting 250,000 businesses and reviving our high streets. We would introduce permanent 100 per cent business rates relief for Retail, Hospitality and Leisure businesses – benefitting 250,000 businesses (HMT, Press Release, 13 November 2024, link).

• Introduce a £5,000 First Jobs Bonus, backing the next generation. Under our plan, the first £5,000 of National Insurance paid by any British citizen starting their first job will be placed into a personal savings account – earmarked for a first home deposit or future savings.

• We will repeal every job-destroying, anti-business, anti-growth measure in the Employment Rights Bill. This is because we recognise Britain cannot prosper with a state that smothers ambition, and a labour market designed solely for union bosses, rather than for the millions of people who want to work, hire, build, and grow (The Standard, 24 November 2025, link).

The Conservatives left a strong labour market and a strong economy:

• When we left office, there were four million more people in work than in 2010, as we grew the economy and created more jobs. In April to June 2024, there were over 33 million people in work in the UK, up by over 4 million since 2010, and the employment rate 4.2 percentage points higher than 2010 (ONS, Labour Market Overview, 13 August 2024, link). 

• When we left office, the unemployment rate had nearly halved with over 1 million people unemployed than in 2010, as we backed businesses, grew the economy, and got more people into work. In April to June 2024, the unemployment rate was 4.2 per cent, down by 3.8 points since 2010 (ONS, Labour Market Overview, 13 August 2024, link). 

• Under the Conservatives, the number of businesses across the UK increased by over one million, with over 5.6 million businesses operating in the UK, creating more jobs and opportunities for people across the country. In 2010, there were 4.5 million businesses and there were 5.6 million when we left office – meaning over 1.1 million new businesses were created under the Conservatives since 2010 because we put the support in place to make the UK the best place in the world to start and run a business (BEIS, Business population estimates for the UK and regions 2023: statistical release,5 October 2023, link). 

• We secured the fastest growing economy in the G7. GDP figures show the economy grew by 0.9 per cent between January and March 2024, the fastest growth in the G7 (ONS, GDP quarterly national accounts, UK: October to December 2024, 28 March 2025, link). 

• We drove down inflation in government, restoring it to two per cent and helping to pave the way for interest rate cuts. When we left office, inflation was on target at 2.0 per cent, down from its peak of 11.1 per cent in October 2022 – allowing the Bank of England to cut interest rates (ONS, Consumer price inflation, UK: April 2024, 22 May 2024, link). 

 British Chambers of Commerce

Reacting to the latest labour market data from the ONS, Patrick Milnes, Head of Policy for People and Work at the British Chambers of Commerce, said:       

“With unemployment at 5%, the expectation is that it will rise this year as business uncertainty grows amid the UK's political unrest and the Iran War. Our latest forecast expects it to increase to 5.5%.    

“A further drop in vacancies, now at their lowest outside the pandemic for more than a decade, suggests businesses are pausing recruitment. This is unsurprising as labour costs remain a key concern.  

“But with the conflict in Iran likely to drive higher inflation later in the year, as unemployment also rises and growth remains weak, the possibility of stagflation is very real.    

“To counter this the government must set out a pro-growth agenda which capitalises on the UK's economic strengths. While AI could boost productivity, its impact on young people entering the job market is a worry, given the further rise in the number of economically inactive people aged 18-24.  

“Firms are also alarmed over plans to remove the lower National Minimum Wage level for 18-21 year olds. Thiscould deter them from employing young adults and place upward pressure on all wage scales. 

“Further action to ease the cost burdens firms face is needed, such as changes to electricity bill levies and reform of business rates. These would also go a long way to boosting confidence.”