North East unemployment rises; however, the North East’s persistent high economic inactivity sees a decrease
Date published:
Josh Maratty, policy adviser at the North East Chamber of Commerce, said:
“The ONS employment figures released today (14 October 2025) show that between June and August 2025, the unemployment rate in the North East for people aged 16 and over increased to 5.7% – 0.9% higher than the UK average (that gap increasing from 0.3% last month).
“Economic inactivity among those aged 16 to 64 was 26.6%, a notable decrease of 1.3% compared with the previous month. This continues the downward trend seen in recent months. While the rate remains 5.6% higher than the UK average, that gap is gradually narrowing, a positive sign for the region’s progress. The reduction represents welcome progress, as persistently high inactivity has held back the North East for too long.”
“The employment rate for those aged 16 to 64 rose to 68.8%, an increase on the previous month. Although it remains 6.3% lower than the UK average, this gap has also begun to narrow, reflecting steady improvement in employment levels across the region.
“New ONS data also published today highlights the reasons behind economic inactivity. While this data set covers the period from July 2024 to June 2025, it helps provide further context for why those aged 16-64 in our region are economically inactive.
“Long-term sickness continues to be the most common reason for economic inactivity, with 32.6% of the working-age population in the North East unable to work due to ill health. While this represents a 1% fall compared with the previous dataset (April 2024 to March 2025), which is a welcome sign of progress, it remains 4.3% higher than the national average of 28.3%.
“With long-term sickness remaining high, it is a sobering reminder that tackling ill health as a barrier to work must remain a priority. The North East Combined Authority’s Economic Inactivity Trailblazer and the Tees Valley Combined Authority’s Youth Guarantee Trailblazer are welcome initiatives that will help more people enter and remain in the workforce.
“It is vital that funding for these trailblazers is protected in the upcoming Autumn Budget. As a Chamber, we will reinforce this message in our submission to the government, as reducing economic inactivity is key to unlocking the North East economy.
“Earlier this month, the Education Secretary addressed Chamber members at our 1815 Lunch, thanking the business community for its continued contribution to local growth. In her remarks, she focused on building strong communities through quality education, childcare and family hubs.
“She also outlined the government’s planned skills reforms, including a post-16 education white paper, £800 million investment in further education, the creation of Technical Excellence Colleges and new flexible apprenticeship routes.
The government’s ambition to shift from a 50% university target to two-thirds of young people in higher-level study, supported by targeted grants, reinforces the need for employers to engage with apprenticeships, T Levels and local skills plans to drive growth, reduce child poverty and strengthen communities.
“Together, we will continue to unlock the North East economy – because we are North East business.”