Small rise in unemployment in West Midlands as wage growth stumbles

For the three months from November to January 2026, the percentage of people aged 16 or over who were unemployed was 6.1 per cent, an increase of 0.2 per cent over the same period.

A total of 73.3 per cent of 16-to-64-year-olds in the West Midlands were in work, a drop of 0.4 per cent on the three months from August to October. The inactivity rate among 16-to-64-year-olds was 21.8 per cent, an increase of 0.3 per cent over the same quarterly period.

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The ONS data also said wage growth had fallen nationally to its lowest level for more than five years.

The research said regular earnings growth fell back to 3.8 per cent in the three months to January, down from 4.2 per cent in the previous three months and marking the lowest level since November 2020.

Wages are now only just outstripping increases in the cost of living, with earnings growth up 0.5 per cent after Consumer Prices Index inflation is taken into account.

The rate of unemployment remained at a near five-year high of 5.2 per cent in the three months to January as the ONS also said vacancies dropped by 6,000 to 721,000 in the three months to February.

Youth unemployment shot up to 14.5 per cent for 18 to 24 year olds in the latest period, reaching the highest level since early 2015, though the rate fell for 16 and 17 year olds, to 29.3 per cent.

But the overall jobless rate was lower than expected, with most economists having forecast a rise to 5.3 per cent while there was also a 20,000 estimated increase in workers on payrolls last month.

Liz McKeown, director of economic statistics at the ONS, said: "Labour market conditions were little changed at the start of the year. The number of workers on payroll rose slightly in the latest month but, overall, the recent picture has been broadly flat.

"Regular wage growth is at its lowest rate in more than five years, with pay growth in both the private and public sectors continuing to ease."

Pat McFadden, work and pensions secretary and MP for Wolverhampton South East, insisted there were signs of stability, with the employment rate reaching 75.1 per cent in the three months to January, after another 84,000 people joined the workforce during the quarter.

He said: "Today's figures show there are 388,000 more people in work than there were this time last year. While this is encouraging, we know there is more to do to get people, particularly young people, into work."

Emily Stubbs, head of policy at Greater Birmingham Chambers of Commerce, said: "Today's figures confirm once again that the West Midlands is struggling to keep pace with the national labour market. Employment has softened locally while unemployment has continued to rise at a rate above the national average and this divergence is having real consequences for households and businesses across our region.

"A combination of economic uncertainty - renewed by recent global events - and ever-increasing cost pressures is restricting firm-level investment, hindering job creation and stifling economic growth. To unlock firm-level investment in the creation of new jobs and ensure businesses can access the talent they need, the Government must also provide clarity and sensible pacing on employment reforms and a plan to ease cost pressures."