Positive signs for North East economy as employment rises whilst unemployment and economic inactivity fall
“The ONS employment figures released today (15 September) show that between May and July 2026, the unemployment rate in the North East for people aged 16 and over was 5.1% (compared to 5.4% last month) – now 0.2% higher than the UK average.
Economic inactivity among those aged 16 to 64 was 24.7%, a decrease from 25.1% compared with the previous month. The local rate is 3.8% higher than the UK average, underlining the scale of the challenge facing the region.
The employment rate for those aged 16 to 64 rose to 71.3% from 71.1% the previous month, which is now 3.8% lower than the UK average.
UK job vacancies continued to soften in May to July 2026, falling 6,000 (0.8%) on the quarter to 707,000. The declines were concentrated in specific sectors; health and social work (-5,000) and education (-4,000) saw the biggest drops, while small businesses (1-9 employees) accounted for most of the fall across employment size bands. Compared with a year earlier, vacancies were down 19,000 (2.7%), with weakness spread across 11 of 18 sectors. Meanwhile, the unemployed-to-vacancy ratio has held steady at 2.5 since mid-2025, suggesting the labour market may be stabilising after a period of tightening from late 2024 onward.
With the October Budget fast approaching – the first under new Prime Minister Andy Burnham and Chancellor John Healey – the Chamber has submitted its key asks on behalf of its members.
These asks are grounded in the pillars of our Unlocking the North East Economy policy plan and focus on: investment, innovation and productivity; delivering a skills system that employers need; unlocking the North East’s energy security and low-carbon opportunities; investment in connectivity and infrastructure to unlock growth; back exporting businesses and international growth; making good growth work for everyone.
Through these pillars, we highlight that the North East has the assets, businesses, people and ambition to make a strong contribution to the UK’s economic success. Businesses need the confidence to invest. They need the skills to recruit and grow. They need affordable energy and reliable infrastructure. They need access to finance and international markets, and they need a stable and competitive environment in which to do business.
Our six priorities are practical and deliverable. The test for this Budget should be whether it gives businesses and employers greater confidence and capacity to invest, innovate, recruit and trade.
The North East stands ready to work with government to deliver that good growth – creating good jobs, raising productivity and ensuring that the benefits of economic growth are felt across our communities and the UK.”