The Bank of England has issued a stark warning that rising minimum wages are pricing young people out of work, as youth unemployment in the UK surpasses the European average for the first time since records began in 2000.
Catherine Mann, a senior Bank of England official, told the Telegraph that 'substantial' increases in the national living wage over the past three years have 'manifested in unemployment' for 16-24-year-olds. 'I think we have to be very careful in the storyline about youth unemployment being the canary in the coal mine for a deeper deterioration in the labour market,' she said.
Data from the OECD shows the UK youth unemployment rate has jumped to 15.3 per cent in the past three months, compared with the EU's 15 per cent. The Resolution Foundation, a think-tank favoured by Labour, has also cited minimum wage increases as a factor, previously calling for the pace of rises to be slowed 'to avoid pricing 18-20-year-olds out of work'.
Official figures reveal the number of employees on payrolls fell by 3,000 in December to 30.2 million, down 184,000 from a year earlier. The overall unemployment rate remains at 5.1 per cent, the highest level in nearly five years, with retail and hospitality sectors particularly affected.
