With the collapse of the U.S. housing market and the subsequent financial crisis on Wall Street in 2007 and 2008, economies across the globe began to enter into deep recessions. What had started out as a crisis centered on the United States quickly became global in nature, as it became apparent that not only had the economies of other advanced countries (grouped together as the G7) become intimately tied to the U.S. financial system, but that many of them had experienced housing and asset price bubbles similar to that in the U.S.. The United Kingdom had experienced a huge inflation of housing prices since the 1990s, while Eurozone members (such as Germany, France and Italy) had financial sectors which had become involved in reckless lending to economies on the periphery of the EU, such as Greece, Ireland and Portugal. Other countries, such as Japan, were hit heavily due their export-led growth models which suffered from the decline in international trade. Unemployment during the Great Recession As business and consumer confidence crashed, credit markets froze, and international trade contracted, the unemployment rate in the most advanced economies shot up. While four to five percent is generally considered to be a healthy unemployment rate, nearing full employment in the economy (when any remaining unemployment is not related to a lack of consumer demand), many of these countries experienced rates at least double that, with unemployment in the United States peaking at almost 10 percent in 2010. In large countries, unemployment rates of this level meant millions or tens of millions of people being out of work, which led to political pressures to stimulate economies and create jobs. By 2012, many of these countries were seeing declining unemployment rates, however, in France and Italy rates of joblessness continued to increase as the Euro crisis took hold. These countries suffered from having a monetary policy which was too tight for their economies (due to the ECB controlling interest rates) and fiscal policy which was constrained by EU debt rules. Left with the option of deregulating their labor markets and pursuing austerity policies, their unemployment rates remained over 10 percent well into the 2010s. Differences in labor markets The differences in unemployment rates at the peak of the crisis (2009-2010) reflect not only the differences in how economies were affected by the downturn, but also the differing labor market institutions and programs in the various countries. Countries with more 'liberalized' labor markets, such as the United States and United Kingdom experienced sharp jumps in their unemployment rate due to the ease at which employers can lay off workers in these countries. When the crisis subsided in these countries, however, their unemployment rates quickly began to drop below those of the other countries, due to their more dynamic labor markets which make it easier to hire workers when the economy is doing well. On the other hand, countries with more 'coordinated' labor market institutions, such as Germany and Japan, experiences lower rates of unemployment during the crisis, as programs such as short-time work, job sharing, and wage restraint agreements were used to keep workers in their jobs. While these countries are less likely to experience spikes in unemployment during crises, the highly regulated nature of their labor markets mean that they are slower to add jobs during periods of economic prosperity.

The statistic shows the unemployment rate in the United Kingdom from 1999 to 2024. The UK's unemployment rate decreased to 4.11 percent in 2024. Unemployment and the economy of the United Kingdom The global financial crisis of 2008 left many nations with high inflation and increasing unemployment rates. The United Kingdom, however, has attempted and successfully lowered the unemployment rate since 2009. The UK is a member of the Commonwealth of Nations, the Council of Europe, the G7, the G8, the G20, NATO, and World Trade Organization. It is therefore one of the biggest and most important economic powers in the world. It consists of England, Scotland, Wales and Northern Ireland, and in 2014, the UK population amounted to over 64 million people. The same year, it reported the sixth largest gross domestic product in the world, reaching more than 2.8 billion U.S. dollars - and with a prospering economy, its GDP is on the upswing: It is estimated that the GDP in the United Kingdom will grow by approximately 3 percent in 2015 in comparison to the previous year. Regarding unemployment, the UK has never been "typically European". Europe's unemployment rate has been relatively high in comparison to other world regions; the unemployment rate in developed countries and the European Union in 2014 was around 7.8 percent. Meanwhile, the global unemployment rate in 2014 was an estimated 5.9 percent. Despite reporting the third highest unemployment rate in major industrial and emerging countries, behind France and India, the unemployment rate in the United Kingdom is much lower than the European Union rate.

Two years after the UK recession ended in the final quarter of 2009, came a decrease in GDP in the final quarter of 2011 and the first quarter of 2012, signifying an official “double dip” recession. This Update looks at key labour market indicators since the beginning of the recession period in 2008. It presents the latest national and London figures of those claiming Jobseekers’ Allowance (JSA), known as the claimant count, and also shows the official unemployment measure: the International Labour Organisation (ILO) definition, which is derived from the Labour Force Survey. It gives some detail on the geography and characteristics of those looking for work. In addition, it gives figures for employment levels.

There were almost 34.2 million people employed in the United Kingdom in the three months to September 2025. In general, the number of people employed has consistently increased, with noticeable dips in employment occurring in 2008 due to the global financial crisis and in 2020 due to the COVID-19 pandemic. Labor market hot streak in 2022 Although there was a sharp increase in the UK's unemployment rate in the aftermath of COVID-19, the UK labor market bounced back forcefully after this sudden shock. By the middle of 2022, the UK's unemployment rate had recovered to pre-pandemic levels, while the number of job vacancies in the UK reached record highs. Wage growth was, by this point, growing at a much slower rate than inflation, which peaked at 11.1 percent in October 2022. In the two years since this peak, the UK labor market has cooled slightly, with unemployment reaching 4.4 percent by December 2024 and the number of job vacancies falling to the lowest figures since May 2021. Characteristics of UK workers As of 2024, the majority of UK workers were working in the private sector, at over 27.6 million workers. In the same year, the size of the UK's public sector workforce stood at approximately 6.1 million, with over two million of these people working for the UK's National Health Service (NHS) and a further 1.66 million in the public education sector. In the UK's private sector, the industry sector that employed the most people was wholesale and retail, which had a workforce of over 4.9 million people, followed by administrative and support service roles at around 3.1 million.

In the third quarter of 2025, approximately 210,000 job resignations took place in the United Kingdom, compared with 263,000 in the previous quarter. The number of resignations in Q2 2022 was the highest number taking place in a single quarter during this provided time period, reaching 446,000. In most years, there is a noticeable trend of resignations peaking in the fourth quarter of the year and being at their lowest in the first quarter. There is also a significant fall in people resigning from their jobs after the 2008 financial crisis and after the COVID-19 pandemic in 2020. The Great Resignation The high number of resignations that took place after COVID-19 hit also occurred in the United States. Throughout 2022, approximately 50 million American workers quit their jobs in a trend dubbed 'The Great Resignation' In both the UK and U.S. the trend corresponded with a very tight labor market. After emerging from the initial COVID-19 lockdowns, UK unemployment declined from 2021 onwards, falling to a low of just 3.6 percent in August 2022. There were also numerous job vacancies, which peaked in May 2024 at 1.3 million, though by the end of 2024, both indicators have returned to more typical levels. Labor market concerns for 2025 One of the main concerns of the UK government regarding the labor market is economic inactivity, in particular the reason for this inactivity, Since the COVID-19 pandemic, the number of people on long-term sick-leave, has increased substantially. At the start of 2020, there were approximately 2.12 million people economically inactive for this reason, with this increasing to almost 2.84 million by the end of 2023, with this declining only slightly to 2.77 million by the end of 2024. It is unclear if there is one overriding factor driving this surge, with possible causes including the prevalence of Long COVID, or the ongoing NHS crisis.