UK minimum wage hike linked to rising youth unemployment, BoE official warns

Sunday 15 - 13:30

By: Sahili Aya

UK minimum wage hike linked to rising youth unemployment, BoE official warns

A sharp increase in the United Kingdom’s minimum wage for younger workers over the past three years has contributed to higher unemployment among this age group, according to Catherine Mann, a member of the Bank of England’s Monetary Policy Committee.

Data shows that unemployment for 18-24 year-olds reached 13.7% in the three months to November 2025, up from 10.2% three years earlier, marking the highest level since late 2020. By comparison, overall workforce unemployment rose to 5.1% from 3.9% during the same period.

Mann told the Sunday Telegraph that the increase in youth unemployment was largely due to disproportionately high minimum wage increases for younger workers, rather than signaling a broader deterioration in the labor market. She emphasized the need for careful interpretation of youth unemployment trends, warning that while unfortunate, the impact is factual.

The minimum wage for 21-22 year-olds has risen by 33% over three years, aligning with the £12.71 ($17.35) hourly National Living Wage for older workers. Meanwhile, the rate for 18-20 year-olds has increased by 46% to £10 per hour. The government has indicated plans to further align wages across all age groups.

Mann, who previously served as chief economist at the OECD, has consistently voiced concerns about inflation and voted against the Bank of England’s last three rate cuts.