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16 May 2023

East Midlands Chamber warns against complacency as region’s unemployment rate rises to highest since October 2021

The East Midlands’ unemployment rate has risen to its highest level in almost 18 months, new figures by the Office for National Statistics (ONS) show.

It was 3.7% in the three months to March 2023, up by two-tenths of a percentage point compared to a month earlier, although still below the national average of 3.9%.

More significantly, this was the highest level recorded in the ONS’ regional labour market figures since the August to October 2021 period, when it was 4.2%.

East Midlands Chamber chief executive Scott Knowles said: “While the region’s unemployment rate remains at historically low levels and about 2% below its pandemic peak, it has been very slowly rising over the past six months.

“This indicates we must not get complacent about the relatively low unemployment rate, which if anything has masked a series of troubling trends facing firms when it comes to recruitment.

“Businesses continue to face a myriad of cost pressures and despite displaying incredible resilience over the past few years, this was always going to be unsustainable and we are seeing their ability to grow being stifled.”

Economic inactivity rate in the East Midlands drops

Meanwhile, the region’s economic inactivity rate – which measures the number of working-age people who have dropped out of the labour market for reasons such as retirement, caring duties, long-term ill health or studying – decreased for the third month running, this time by half a percentage point to 21.4%.

This is the lowest figure over the past 12 months but remains above the UK average at 21%.

National figures also show there were more than 400,000 people not working due to long-term sickness, a new record, with the ONS noting a particular rise in mental health conditions among young people.

Scott added: “The Government has talked a lot about tackling the deep-rooted problem regarding economic inactivity among working-age people and, to an extent, we are now seeing some of its interventions bearing fruit as this slowly eases.

“However, the economic inactivity rate remains almost 3% above pre-Covid levels, which indicates it continues to be a thorn in the side of many employers.

“Our Quarterly Economic Survey for Q1 2023 showed that recruitment problems persist. Six in 10 (59%) East Midlands businesses attempting to recruit in the first three months of the year but, of those, 73% faced problems filling roles.

“In our Business Manifesto for Growth, we have set out a list of policies we believe will make the required difference, including introducing flexible incentives for businesses that invest in staff training and bringing forward the introduction of the Lifelong Loan Entitlement to support retraining and the retainment of an older workforce.

“We must also tailor policies to recognise the diversity of people who are out of work and avoid a one-size-fits-all solution. We would also like to see Government work with businesses to offer support, and share best practice, on what a flexible and inclusive workplace looks like as this is another vital ingredient in enticing people back to work.”

To read the Chamber’s Business Manifesto for Growth, A Centre of Trading Excellence, visit

Tackling skills shortages and economic inactivity will be part of the agenda at the Chamber’s East Midlands People and Skills Summit on Thursday 8 June.