Unemployment rate

Last updated: March 2026

Next estimated update: June 2026

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 using annual data up to quarter 3 data for each year (September 2025).

What does it tell us?

The picture now

Over the last three years there has been a jump in unemployment in London. Inner London has seen it increase from 4.0% in 2022 to 5.3% in 2025. In outer London unemployment did not show a consistent trend between 2022 and 2024, but has seen sharp increase to 5.8% in 2025. In the rest of England rates increased more gently from 3.5% to 4.0% over the same time period.

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 20121 to 2019, from 10.5% to 4.5%. It recovered to pre-financial crisis levels in 2014. In Outer London, it declined from its peak of 9.2% in 2012 to 4.7% in 2019, and did not recover its pre-crisis levels until 2016.

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 2019 to 2021 the unemployment rate in Inner London rose by 36% (1.6 percentage points) and in Outer London by 45% (2.1ppts) compared to the Rest of England, where it rose by 18.4% (0.7ppts).

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.

Unemployment by age

Young Londoners are especially likely to be unemployed. In the second quarter of 2025, 16.7% of Londoners aged 16-24 were unemployed, compared to 12.8% in the rest of the country and 4.3% among older Londoners.

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 and are ‘economically inactive’.

A person is ‘economically inactive’ when they aren’t looking for a job or able to start work, for example because they are retired, studying, have caring responsibilities, or are too sick to work.