Unemployment rate over time (2005 Q1 - 2025 Q1)
Last updated: September 2025
Next estimated update: November 2025
What does this indicator show?
This indicator shows the unemployment rate over time for London, the rest of England, and for Inner and Outer London. It uses annual data up to quarter one for each year.
What does it tell us?
The picture now
Over the last two years there has been a jump in unemployment in inner London, from 3.9% in 2023 to 5.7% in 2025. This sharp increase hasn’t been seen in Outer London, where unemployment only increased by 0.3 percentage points to 4.9%, or in the rest of England, where the rates increased only slightly from 3.5% to 3.7%. Further data points are needed before we can know if this is a significant change in the trend or a product of volatility in the survey data.
Both Inner and Outer London have higher unemployment rates than the rest of England.
How this has changed over time
Unemployment peaked following the financial crash, and then steadily declined between 2012 until 2020. In Inner London, the unemployment rate more than halved from 2012 to 2020, from 10% to 4.5%. It recovered to pre-financial crisis levels in 2015. In Outer London, it declined from its peak of 9.3% in 2012 to 4.7% in 2019, and did not recover its pre-crisis levels until 2017.
Unemployment surged in 2020, likely as a result of the economic impact of the COVID-19 pandemic, although this did not come close to the levels seen during the financial crisis. This appears to have been sharper in London. Between 2020 to 2021 the unemployment rate in Inner London rose by 38% (1.7 percentage points) and in Outer London by 22% (1.1ppts) compared to the Rest of England, where it rose by 24% (0.9ppts).
Throughout the period covered in this indicator, unemployment has remained consistently higher in London than in the rest of England. The gap between London and the rest of England has remained relatively stable over time, but if the inner London jump seen in 2024 and 2025 persists this will mark a significant departure from that trend.
What is unemployment?
The unemployment rate is the percentage of people that are able or willing to work but don’t currently have a job. It only includes those who are looking for a job or are able to start work soon, and doesn’t count those who are of working age but unable to work or not looking for work. Instead, this group is counted as 'economically inactive', and includes people who are retired, studying, have caring responsibilities, or are too sick to work.