Businesses need help to unlock new jobs as unemployment rate rises again – Chamber

Business leaders in Greater Birmingham today called on the Government to help stimulate the job market – as new figures revealed a sharp increase in unemployment.

The West Midlands had the biggest increase in unemployment of any UK region during Q1 of 2025 – rising by 1.3 per cent, the Office for National Statistics (ONS) said today.

Employment increased by 0.8 per cent and the economic activity rate decreased by 1.9 per cent.

Both the employment (0.7 per cent) and unemployment (0.5 per cent) rates also rose nationally but at a slightly slower rate.

Meanwhile, vacancies across the UK have continued to fall and the number of people on payrolls dropped.

Job openings fell by 5.8 per cent to 718,000 between May to July across nearly all industries.

Average wage growth remained at 5 per cent.

Emily Stubbs (pictured), head of policy at Greater Birmingham Chambers of Commerce, said: “Having seen the largest increase of any region since the first quarter of 2025, the unemployment rate in the West Midlands is currently the second highest in the country.

"Over the past year, a rise in both employment and unemployment has been driven by significant decreases in economic inactivity, as many who previously left the workforce have now returned.

“However, cost pressures continue to constrain economic growth, and have contributed to vacancies consistently falling for more than three years.

“Vacancies now sit below pre-pandemic levels, and the ONS have warned that some firms are not recruiting new workers or replacing workers who have left.

“Despite wage growth easing, following the national insurance hike earlier this year, labour costs remain the biggest cost pressure for firms, cited by 34 per cent of respondents to our latest survey. 

“Last week, the Bank of England recognised this, citing a recent increase in firms’ costs contributing to weak employment growth across the country.

"Meanwhile, concerns raised by employers about the looming Employment Rights Bill have been echoed by independent bodies including the Office for Budgetary responsibility.

“The Chancellor must use the upcoming Autumn Budget to meaningfully alleviate the cost pressures on businesses to unlock new jobs for those seeking work.”

"Whether its young people entering the labour market, people looking to return to work, or those wishing to develop in their career – they all rely on thriving businesses.  

“The Government must help, not hinder, firms to attract and retain the people and skills needed to grow our economy.”