North East employment breaks through 70%, as unemployment falls and economic inactivity declines for a fifth consecutive month
Date published:
Josh Maratty, policy adviser at the North East Chamber of Commerce, said:
“The ONS employment figures released today (16 December 2025) show that between August and October 2025, the unemployment rate in the North East for people aged 16 and over was 5.6% – 0.5% higher than the UK average (but down on last month, while the UK rate continued to rise, meaning the gap has narrowed further).
“Economic inactivity among those aged 16 to 64 was 25%, a welcome decrease of 1.3% compared with the previous month. While the inactivity rate remains 4% higher than the UK average and continues to present a challenge for sustainable growth, the fifth consecutive monthly fall is highly encouraging. Persistently high economic inactivity has long constrained the North East’s potential, making this sustained downward trend particularly important as we work towards a more dynamic and inclusive economy.
“The employment rate for those aged 16 to 64 rose to 70.5%, which remains 4.4% lower than the UK average. Despite this gap, this marks the first time since March 2025 that employment in the North East has exceeded 70%, a significant milestone for the region.
“While these figures point to improving labour market conditions, they also underline the importance of continued action to boost participation, strengthen skills and give businesses the confidence to invest and hire.
“Last month, the Chancellor delivered the Budget to Parliament. The Chamber welcomed the decision to scrap the two-child benefit cap, which will help tackle child poverty and support more parents to enter and remain in meaningful employment.
“We were also encouraged by the announcement of £13 billion in flexible funding devolved to Mayoral Strategic Authorities. This reflects longstanding calls for greater devolution to drive regional growth and productivity. Key investments include £16 million for a new STEM Centre in Darlington, support through the Creative Places Growth Fund, an AI Growth Zone, access to a Revolving Growth Fund and Local Growth Funding for both the Tees Valley and the North East.
“Further commitments on planning and development are also welcome, including funding for the Forth Banks development in Newcastle and £48 million to address planning system capacity issues. This challenge was first highlighted through the 2023 Tees Valley Local Skills Improvement Plan, demonstrating how business-led insight can shape national policy. The full funding of apprenticeships for under-25s is also important in creating new entry points into the labour market and supporting long-term workforce development across the region.
“However, businesses across the North East continue to face significant pressures, including rising employment costs, ongoing skills shortages and uncertainty about how some of the Budget measures will work in practice. While the direction of travel is positive, many employers will need time and clarity to understand how these changes affect recruitment, investment and day-to-day operations.
“Now that the Budget has been delivered, it is critical that government provides certainty, clear guidance and ongoing support to business. This will be essential to rebuilding confidence and reversing the scaling back of hiring seen in the run-up to the announcement.
“As a Chamber, we approach the Budget with cautious optimism. We will continue to listen to our members, reflect their experiences and work with government and regional partners to ensure policy translates into real-world benefits for businesses and communities across the North East.”
Ends
Note to Editors
- Official statistics under review published by the ONS suggest that between August to October 2025, the unemployment rate in the UK for ages 16+ was 5.1%. In the North East, this was higher at 5.6%.
- The UK’s employment rate for ages 16-64 was 74.9%. In the North East, this was lower, at 70.5%.
- The UK’s economic inactivity rate for ages 16-64 was 21%. In the North East, this was higher at 25%.
- The ONS continues to use experimental data following issues with data collection earlier this year and in 2024, which made employment figures unavailable for a period. For more details on the ONS’ switch from experimental data to official statistics under review, please click here.