Unemployment in the East Midlands for those aged over 16 fell slightly to 4.8% in the second quarter of 2025, down from 5%, according to recent Office for National Statistics data. Meanwhile, UK-wide average annual earnings growth slowed to 4.6% over the same period.
Despite the small improvement in joblessness, local firms report persistent difficulties in recruiting suitable candidates, highlighting a significant skills shortage. Data from the East Midlands Chamber’s Quarterly Economic Survey shows that 60% of businesses have struggled to find qualified staff. Recruitment efforts are weakening, with only half of firms actively trying to hire—a decline over recent quarters.
Business confidence remains fragile amid rising operational costs. Employers are grappling with increased National Insurance contributions and a higher national living wage, which add pressure to budgets. Concerns around corporate taxation and regulatory burdens are also weighing heavily on firms’ outlooks.
The Chamber has raised concerns over the Employment Rights Bill, citing potential increases in administrative duties for employers, such as managing statutory sick pay from day one and contract adjustments. The Chamber has urged political leaders to amend the bill to lessen compliance pressures and called for budget measures that avoid further tax hikes or additional costs on businesses.
The overall message is clear: while unemployment has marginally improved, businesses require targeted political support to navigate recruitment challenges, control rising expenses, and maintain economic stability in the East Midlands.
