Young people are paying for Britain’s hiring freeze as firms hold back amid the Iran war’s energy shock, Bank of England deputy governor Clare Lombardelli said, adding that a December rate rise is “certainly plausible.”
MoneyTurkey Economics Desk | 10 November 2026
Key points
- Lombardelli described a “low-gear economy” in an interview with the Guardian: hiring has fallen off, but redundancies remain low.
- The official UK unemployment rate is 4.7% in June to August, down from 4.9% in May to July, according to the ONS. Youth unemployment reached 16.4% in May to July, the highest rate since 2014, and eased to 15.6% in June to August.
- She voted with the majority to lift Bank Rate from 3.75% to 4% last week and said December is “live,” with markets pricing about a 50/50 chance of another quarter-point rise.
What she said
“What you see is the cost falling on young people, so you can see this rapid rise in the number of young people who are struggling to find jobs,” Lombardelli told the Guardian. Employers are delaying hiring while they wait to see whether the uncertainty from the conflict resolves, she said, and that hits people new to the labour market first.
Vacancies have fallen most in the sectors that give young people their first job, such as hospitality and retail, she said. Firms surveyed by the Bank reported “a sense that hiring a young person is a higher risk than it used to be.” The number of young people not in education, employment or training has risen to almost one million.
The rates angle
The Bank raised rates last week for the first time in three years. “Every meeting is live for us. December is, you know, it’s certainly plausible,” Lombardelli said, adding that the decision depends on the conflict, energy prices and the wider data, and that she does not yet have enough information.
She also warned that rising unemployment may not cool inflation, because firms that are holding staff are only hiring for hard-to-fill roles. “You can have higher unemployment without it exerting a downward pressure on inflation,” she said. “So that’s obviously a problem.”
What to watch
- Lombardelli’s speech in London on Tuesday on labour-market dynamism
- Alan Milburn’s report on young people and work, expected next week
- The December MPC decision, oil prices and progress on US-Iran talks
Related on MoneyTurkey
- Riksbank Minutes: Two Members Open to December Hike
- Philippine Peso Hits Strongest Close in Nearly a Month
For information only. Not investment advice.
