The estimated unemployment rate in Scotland was 4.3% in the May to July 2023 quarter, up 1.2 percentage points over the previous quarter and up 0.6 percentage points since the December 2019 to February 2020 (pre-pandemic), according to the latest Office for National Statistics (ONS) Labour Force Survey.
Scotland’s unemployment rate was the same as the UK.
The estimated employment rate in Scotland was 75.1%, up 0.5 percentage points over the quarter but down 0.3 percentage points since December 2019 to February 2020 (pre-pandemic).
Scotland’s employment rate was slightly below the UK rate of 75.5%.
The estimated economic inactivity rate in Scotland — the proportion of people aged 16 to 64 years who were not working and not seeking or available to work — was 21.4%, down 1.5 percentage points over the quarter and down 0.2 percentage points since December 2019 to February 2020 (pre- pandemic).
Scotland’s economic inactivity rate was slightly above the UK rate of 21.1 per cent.
The Scottish Government’s Wellbeing Economy Secretary Neil Gray said: “The rise in the employment rate over the quarter and fall in the inactivity rate are welcome.
“The increase in the unemployment rate over the quarter and the year for those aged 16 and over across Scotland reflects the ongoing challenges facing the economy amid the ongoing cost-of-living crisis, compounded by high inflation and interest rates.
“The Scottish Government is committed to supporting more people into work – including those with a disability, those with health conditions and those with caring responsibilities – through employability and skills support as well as continuing to support and promote flexible working.
“However, with industries such as hospitality and agriculture still facing recruitment challenges an urgent reassessment of UK Government immigration policy is necessary to increase access to the international labour and skills that Scotland needs for our economy and communities to prosper.”
The UK Government’s Scottish Secretary Alister Jack said: “Even in the face of global challenges, Scotland’s job market has remained resilient.
“Since 2010, the number of people in work in Scotland has increased by over 200,000 – but we know there is more to do to help people find and succeed in fulfilling jobs.”
Professor Stuart McIntyre of the Fraser of Allander Institute at the University of Strathclyde said: “The magnitude of the jump in the unemployment rate in the latest data is a surprise, even if signs of a weakening in the labour market are not.
“This increase in the unemployment rate is primarily driven by changes in those economically inactive rather than in employment. Indeed, the employment rate has increased over this same period.
“What to make of this?
“Economic inactivity is a broad category encompassing everything from those in full-time education, to those who are too sick to work and those who are retired. Movements into and out of economic inactivity reflect a mix of push and pull factors.
“Weak growth in the economy, coupled with a period of wage growth lagging behind inflation, has squeezed household budgets and will be pushing more people who were economically inactive to search for work. In turn, increasing the unemployment rate and reducing the rate of economic inactivity.
“So long as the employment rate remains relatively high, this increase in the supply of workers could help address recruitment challenges and in turn ease some of the inflationary pressure.
“The worry is that the current economic headwinds will start to feed through to lower employment as well as higher unemployment in the months ahead.”