ERC Chart of Week – Regional Unemployment

Regional Unemployment

Summary:

The UK unemployment rate in the third quarter of this year was announced today, and it has continued to fall to 6% – the lowest level since 2008. However, there are huge regional differences within the UK.

Regional Unemployment

 

What does the chart show?

The graph shows the quarterly unemployment rate (the percentage of people who do not currently have a job out of everyone who either has a job or is currently looking for one) for everyone aged 16 and over for a variety of regions. The black line represents the headline UK total figure, while each of the coloured lines represents a different area of the country.

 

Why is the chart interesting?

Although unemployment in total has been decreasing quickly over the past year, there are huge disparities between different regional labour markets. At one extreme there is the South East of England, which has always had relatively low unemployment and was not affected as badly by the recession as elsewhere. The current unemployment rate in the South East is 4.6%, which is lower than the UK average was even in the boom years before the crash. At the other extreme is the North East of England. While it has usually experienced higher unemployment rates than the national average, the North East has not always been the worst regional labour market, but was hit particularly hard by the 2008 crisis, with unemployment peaking at 12% towards the end of 2009. The unemployment rate in the North East has fluctuated around the 9.5% level for the past year or so, which is much higher than the UK average was at the height of the crisis.

 

There are other interesting regional variations as well. Despite London and the South East often being grouped together, London actually has a higher unemployment rate than the UK average, and has consistently been much higher than the surrounding South East region. Scotland was, for a while, similar to the South East, but the recession pushed it back up to being roughly representative of the UK as a whole. The West Midlands has traditionally been a region with mid-range unemployment, but it was probably affected the most by the recession in 2008, peaking at over 10.5% as early as the beginning of 2009, and is only just starting to recover now.

Source: The Economic Research Council

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