Closing post
Time to wrap up…
The Iran war is continuing to push up prices, hitting Americans in the pocket, while Britain has been warned it risks creating a ‘lost generation’ of young people.
The US personal consumption expenditures price index rose 3.8% from a year earlier, the biggest monthly rise since 2023, driven by higher energy costs.
The US economy also grew slower than first thought at the start of the year – GDP expanded at a rate of 1.6% per year, down from 2% first estimated.
Oil has dropped back from its earlier highs, after reports that the United States and Iran have reached an outline agreement to extend their ceasefire, subject to the approval of President Donald Trump.
Britain risks a financial hit worth £125bn a year from a worsening crisis in youth worklessness after a rise in the number of young people not in employment or education to more than 1 million.
In a landmark government-backed report, Alan Milburn warned that Britain’s economy and the public finances were losing billions of pounds a year amid the growing risk of a “lost generation” of young people.
The former Labour cabinet minister said youth disengagement was a mounting economic risk to the country, as he urged the government to undertake a fundamental reset of policy covering schools, the health service and the welfare state.
The warning came as the number of ‘neets’ hit one million for the first time in over a decade.
Oil drops back
It’s another rollercoaster day for the oil price.
Having been up 2% earlier, Brent crude has sunk back to $94.50, only slightly above where it began the day, after Axios reported that the US and Iran have reached an agreement on a 60-day memorandum of understanding to extend thei ceasefire and launch negotiations on Iran’s nuclear program.
Wall Street has now turned positive, on a new report that the US and Iran are inching towards a breakthough.
Axios are reporting that US and Iranian negotiators have reached an agreement on a 60-day memorandum of understanding to extend the ceasefire and launch negotiations on Iran’s nuclear program.
However, President Trump has yet to give it his final approval, they add….
Johnson Matthey makes £340 takeover bet on AI data centre boom
British chemicals company Johnson Matthey may spend as much as £340m on a takeover in a bet on a US business benefiting from the AI data centre boom.
The FTSE 250 company will pay $360m plus another possible $100m to buy Cormetech, which makes materials for catalytic converters used to clean the fumes created by fossil fuel generators attached to data centres.
The surge in global demand for data centres is being led by so-called hyperscalers like Amazon, Microsoft, Google owner Alphabet and Facebook owner Meta. Their investments are putting huge pressure on energy supplies, with big tech companies sidelining previous efforts to cut carbon emissions and installing generators to power the racks of computer chips. At the same time, Donald Trump’s administration has actively opposed the development of renewable energy supplies.
The consequent expansion in demand for generators has already helped Johnson Matthey, an expert in the platinum group metals used in converters that reduce harmful pollutants. However, the British company’s focus is on diesel generators that are mainly used for back-up power, while Cormetech works on gas turbines that are used as the main power source for many data centres.
Liam Condon, Johnson Matthey’s chief executive, said the data centre boom offered a “very sustainable growth trajectory for the simple reason that demand far outweighs supplies. You can’t actually get enough gas turbines quick enough.”
“For the hyperscalers it’s a bit of a life or death race. If they don’t have enough energy it’s kind of game over. The energy demand is insatiable.”
Some analysts have questioned whether the boom is sustainable, but Condon said that even under “very prudent” forecasts, there was still far more demand than supply.
Johnson Matthey has also benefited from the slower than expected shift away from petrol and diesel engines, which require its catalytic converters to meet emissions regulations. Condon is leading an effort to increase the profitability of that business even as it shrinks by cutting costs and closing manufacturing. The unit increased its profit margins by 2.7 percentage points in the year to 31 March, to 14.5% before one-off costs. The business is aiming for profit margins of between 16% to 18% in the 2027/28 financial year.
There’s a muted start to trading on Wall Street.
With tensions between the US and Iran intensifying, the S&P 500 share index has dipped by five points, or 0.075%, to 7,514.61 points.
The narrower Dow Jones Industrial Average has lost 75 points, or 0.15%, to 50,569 points.
The jump in the US PCE inflation measure to its highest since 2023 shows that Americans are being squeezed financially, reports Heather Long, chief economist at Navy Federal Credit Union.
“Inflation is at a three-year high and personal savings has cratered to one of the lowest levels in the past 20 years. Many Americans are spending more than the income they have coming in. This is not sustainable, especially for lower-income and middle-class households.”
[And the midterms are coming up….]
Updated
US PCE inflation rate hits three-year high
A key measure of US inflation has hit its highest level in three years.
Higher energy prices amid the war with Iran drove up costs for US consumers in April, according to the personal consumption expenditures price index.
The US PCE index rose by 3.8% in the 12 months through April, the largest rise since May 2023, up from 3.5% in March.
Energy costs saw the biggest increase in April, but prices also rose in other spending categories too.
The core PCE index, which strips out food and energy, rose by 3.3% year-on-year in April after rising 3.2% in March.
PCE is the US central bank’s favoured inflation measure, as it tries to keep rises in the cost of living at around 2% a year. High and rising inflation will make it rather harder for the Federal Reserve to lower interest rates.
Scott Helfstein, head of investment strategy at Global X ETFs, says:
“The hotter inflation report is not a surprise. The market has already shifted expectations on interest rates 180 degrees this year from cuts to hikes. So, this inflation report should be baked into asset prices. This is good news. Investors can focus on fundamentals and the real economy rather than trying to game Fed moves.”
Oil back towards $100....
The oil price is risen today, as hostilities between the US and Iran heat up again.
Brent crude has gained almost 2% to over $96 a barrel.
Traders have noted that the US carried out new strikes inside Iran, targeting a military facility and downing Iranian attack drones, prompted the Iranian retaliatory attack on an American airbase in Kuwait.
Markets dip amid Middle East hostilities
Global financial markets are in retreat again today, as tensions in the Middle East rise.
The UK stock market has dropped, with the FTSE 100 share index currently down 0.9% or 91 points at 10,414 points.
Renewed US-Iran hostilities are clouding the prospects for reopening the strait of Hormuz, putting investor optimism over the crisis under pressure.
Weapons producer BAE Systems (+1.3%), and oil producers Shell (+0.7%) and BP (+0.4%), are among the risers.
This comes after Kuwait named Iran as the culprit behind attempted missile and drone attacks against the Gulf state, after the US targeted a military facility in Iran and downed four attack drones.
US Central Command forces shot down four Iranian one-way attack drones that posed a threat around the Hormuz strait, according to the officials, and struck a ground control station in the port city of Bandar Abbas that was about to launch a fifth drone. Iranian state broadcaster Irib reported later on Thursday the Revolutionary Guards had targeted an American base in Kuwait “that served as the source of the attack”.
Israel’s IDF has confirmed it carried out “a targeted strike in Beirut”, while local media in Lebanon have also reported that at least a dozen people have been killed in Israeli attacks on the south of the country.
European markets are also dropping, with Germany’s DAX and France’s CAC share indices both off 0.5%.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, reports that markets are in a ‘fragile mood’:
The issue for investors is that markets have started to price in the Middle East conflict being largely contained, which means positive headlines now have less power to lift sentiment, while any setback can quickly take the shine off.
Hopes yesterday around the reopening of the Strait of Hormuz offered some relief, but renewed hostilities and fresh uncertainty over key sticking points, including shipping traffic and the nuclear programme, have brought caution back to the fore.
Updated
US growth revised down
Elsewhere in the world economy today, the US didn’t grow as fast as first estimated in January-March.
US GDP rose at an annualised rate of 1.6% in Q1 2026, new data from the Bureau of Economic Analysis shows, the equivalent of a 0.4% rise in the quarter.
That’s down from an initial estimate of 2% annualised growth.
The BEA says it has revised down its estimates of investment and consumer spending in the last quarter.
This still shows a pick-up compared to the end of last year, thanks to upturns in government spending and exports.
TUC blasts “cynical attempts” to blame workers’ rights laws for Neets crisis
TUC General Secretary Paul Nowak is urging the government to ignore “cynical attempts to blame new workers’ rights laws” for the rise in Neets.
Pushing back against criticism of the youth minimum wage, Nowak says:
Young people pay the same bills as everyone else and deserve a fair wage for their work.
“Youth rates are not only unfair, but they’re also increasingly obsolete as most businesses hardly use them.
“Cutting the minimum wage for young workers is not the way to get – or retain – them in the jobs market.
“The independent experts at the Low Pay Commission have said employment for young people has done better where minimum wage coverage is highest – and shown that successive governments have closed the gap between the adult rate and youth rate with no negative impact on employment.”
Milburn has explained why the Netherlands has such a low Neets rate (5.3%), while the UK’s is almost three times higher, telling reporters:
First of all, it’s about the question that you ask, which is they make a priority of vocational education and investment in it. And when you look at the numbers, there’s a far higher proportion of Dutch kids, Dutch young people, in the equivalent of our FE colleges than there are here. So they’ve made a deliberate choice and it’s produced a pretty good outcome.
Secondly, they approach things in different structural way. So one of the very striking features of the Dutch system, for example, is it’s much more integrated. The services pull together. Ours is fractured. They’re integrated. They’re pulled together.
There’s one data set. Critically there’s one organisation responsible. We have no one responsible here because everyone is.
And the final part of the action that they seem to get right, that we get wrong, is that employers are much more engaged from the outset with the education system, so that kids are getting familiarity with employers, with the world of work, with work experience, with all of those things that we know that employers are crying out for.
Our Politics Live blog has more details:
Lizzie Crowley, senior skills adviser at the HR body CIPD, says the government should suppor a new Apprenticeship Guarantee for all 16-24 year olds, to help younger people get opportunities.
“Young people are desperate for an opportunity to prove themselves, but many are struggling to navigate a labour market where entry-level opportunities, work experience and structured progression routes have become harder to access.
“Today’s Milburn Review findings and ONS figures highlight that much bolder action is needed to support youth employment given the collapse in the number of apprenticeships for 16-24 year olds and the general reduction in entry level roles.
UK risks £125bn hit a year from youth unemployment, landmark report says
Britain risks a financial hit worth £125bn a year from a worsening crisis in youth worklessness after a rise in the number of young people not in employment or education to more than 1 million.
In his landmark government-backed report, Alan Milburn warned that Britain’s economy and the public finances were losing billions of pounds a year amid the growing risk of a “lost generation” of young people.
Firms blame rising labour costs
UK businesses are blaming the government for raising employment costs, fuelling the Neets crisis.
Helen Dickinson, chief executive of the British Retail Consortium, says the retail industry has shed almost 400,000 jobs in the last decade, meaning fewer opportunities for young people.
Dickinson points to the tax rises in Rachel Reeves first budget, saying:
“The patchwork of support for jobseekers and employers is complex and often misaligned. Interventions like the Youth Jobs Grant and Jobs Guarantee are welcome but are held back by the massive rise in employment costs and regulations faced by businesses.
In April 2025, the cost of employing someone in a full-time entry level job rose by 10%, and part-time an additional 13%. Implementation of aspects of the Employment Rights Act risk limiting more entry level jobs. Government must join the dots between tax, red tape, and its efforts to reduce unemployment.
Allen Simpson, chief executive of UKHospitality, also blames the rise in employers’ national insurance rates (NICs):
“This interim report is clear sighted analysis of how significantly increasing employment costs directly reduces job opportunities, particularly for young people.
“The rapid loss of around 100,000 hospitality jobs after the 2024 Budget and the increase to employer NICs was the canary in the coal mine and should have been recognised as such by the Government.
“The solution is to reduce the cost of employment for hospitality businesses. As the biggest youth employer and driver of social mobility, thousands of job opportunities can be unlocked as a result. The Government needs to make it economically beneficial to employ young people once again.
Milburn: Employers are 'absolutely critical' for fixing youth unemployment crisis
It is vital that UK employers create more job opportunities for young people, Alan Milburn tells reporters.
Milburn (born in 1958) says his generation grew up with the idea that you’d walk into work, perhaps starting with a Saturday job.
He also reveals he was sacked from an early stint as a paperboy in Newcastle for not getting out of bed.
He says:
Employers are absolutely critical to this. unless we can generate more opportunities for young people we’re really not fixing the generational crisis.
Alan Milburn has now been asked why the UK has a worse Neets crisis than Europe.
He says the problem goes back decades and is a structural problem, with the UK’s persistent lack of a sustained strategy and a proper architecture to help young people.
People have seen it but not acted in the past, deciding instead to play the ‘blame game’, blaming phones, parents, employers, or politicians, he added.
EU Neets total has dropped
We flagged earlier that Milburn believes the UK’s Neet problem is worse than in other countries – and new data has just born this out!
Across Europe, the Neet crisis eased slightly last year.
Across the EU, the share of young people who were not in employment, education or training (Neet) dipped to 11.0% in 2025, down from 11.1% in 2024.
Back in 2015, at the height of the eurozone debt crisis, 15.2% of young people in the EU were out of work, training or education – so there’s been quite a recovery over the last decade.
The EU’s Neets data tracks people aged 15 to 29, while the UK looks at 16-24 year olds, so the data is only broadly comparable.
But even so, the contrast is notable.
The lowest Neet rates for young people were registered in the Netherlands (5.3%), Sweden (5.9%) and Slovenia (7.6%). In contrast, the highest rates were in Romania (19.2%), Bulgaria (13.8%) and Greece (13.6%), statistics body Eurostat says.
Reminder, the UK’s Neet rate is now 13.5%, after rising in the first quarter of this year.
Milburn: One million Neets is a 'warning'
Alan Milburn begins his speech by pointing to this morning’s data showing that more than a million young people are not in eductation, employment or training.
The former health secretary says:
It’s more than a statistic, it’s a warning. A warning that far too many young people are reaching adulthood only to find the door to opportunity closed.
Milburn also describes ‘neet’ as an ugly term with ugly consequences.
Aspirations thwarted, confidence drained, futures narrowed before they’ve properly begun.
Alan Milburn is giving a press conference now to discuss his interim report into the rising number of young people not in work or education in the UK.
He’s being introduced by Pat McFaddon, Secretary of State for Work and Pensions. McFaddon is explaining that responding to the report is a task for ‘all of government’, and beyond.
My colleague Andrew Sparrow is live-blogging the event here:
Alan Milburn’s report into the UK’s Neets crisis has now been published.
My colleague Peter Walker has read it, and reports:
Its 217 pages cover the extent and causes of the issue – with possible solutions coming in his next report – and set out a hugely detailed and damning picture of what Milburn calls a “record of failure”, one that is letting down young people.
Here are the key points:
IPPR: One million Neets is a national crisis and a human tragedy
Over 1 million young people being out of work and out of education is “a national crisis” for the UK, says Ellie Harris, principal research fellow and head of children and young people at the IPPR thinktank.
“Yes, it’s an economic challenge, but it’s also a human tragedy – young people are being blocked from learning new skills, getting their first job and becoming independent.
“We’re wasting a generation’s talent, skill, and potential. We must act urgently, so that young people are supported to live a life of opportunity, that gives them a sense of self-worth.”
The jump in the number of young people aged 16–24 not in education, employment or training to over a million shows that more government support is needed, says Jon Fitzmaurice, head of external engagement at the Work Foundation at Lancaster University.
Fitzmaurice warns that current Government youth employment interventions “appear to be seriously underpowered”, explaining:
“The Jobs Guarantee and Youth Jobs Grant could help some young people into work, but together they are expected to support around 50,000 people a year. In an unforgiving labour market, with vacancies continuing to fall and demand for traditional entry-level roles weakening, much more ambitious action will be needed – particularly for young people facing multiple barriers to work.
“These statistics underline the need for a longer-term strategy. Government must take a bolder approach to expanding tailored employment support and job creation, working closely with trusted local partners and employers to help young people access secure and sustainable work. But it must also tackle the deep-rooted inequalities –including educational disadvantage, poor health and unequal access to opportunity – that shape young people’s prospects long before they enter the labour market.”
Four hundred thousand of the UK’s one million ‘Neets’ were unemployed, the ONS reports.
That’s 45,000 more than in the first quarter of 2025, but actually 11,000 fewer than in the last three months of last year.
An estimated 257,000 of these unemployed young people were young men, and 143,000 were young women.
The ONS defines unemployed to be “actively seeking work within the last four weeks and are available to start work within the next two weeks.”
That leaves around 613,000 young people who were classed as ‘economically inactive’ – ie, neither in work nor looking for a job.
Updated
Elise Rohan, head of labour market output at the ONS, says:
“The number of young people not in employment, education or training rose above one million in the first quarter of 2026, to its highest level in more than 12 years. This was driven by greater numbers of young people no longer looking for work.”
More than one million young people not in education, employment or training
Newsflash: The number of young people in the UK not in education, employment or training (Neets) has risen over one million, for the first time in over a decade.
The Office for National Statistics has just reported that there were 1,012,000 young people, between the ages of 16 and 24, who were ‘Neet’ in January to March 2026.
That’s an increase of 89,000 over the last year, and 55,000 more than in the previous quarter.
That’s a timely example of the growing Neets crisis, as Alan Milburn releases his report into the situation today.
The ONS says:
This increase was largely among young men, with an increase of 55,000 on the year, as well as an increase among young women of 34,000 on the year. Of the total number of young people who were NEET, 553,000 were young men and 459,000 were young women.
Eyeballing the ONS’s data, this looks to be the first time since October-December 2013 that there have been more than one million 16-24 year olds not in education, employment or training
It takes the percentage of all young people in the UK who were NEET in January to March 2026 up to 13.5%.
Updated
Elsewhere this morning, Labour has adopted regulations intended to prevent local councils from going bust after they make risky investments that jeopardise their finances.
Ministers will be handed powers to intervene that have been dormant since 2003, the ministry of housing, communities and local government (MHCLG) said.
Several councils have been forced to take government loans after investments turned sour and they ran out of funds.
Woking in Surrey accumulated £2bn of debts following a revamp of the town centre while Thurrock in Essex ran up debts of £1.5bn after a series of investments largely in solar farms.
Councils were given more autonomy to make large investments in 2015 by former Conservative chancellor George Osborne, in part to offset a freeze on council tax bills.
There have been calls for the Labour government to reinstate the Audit Commission, a watchdog that audited the sector’s finances until the function was outsourced to the private sector in 2012.
Local government minister Alison McGovern said the new rules would be sufficient to prevent a repeat of the worst cases, saying:
“In Woking, Thurrock, and other councils we’ve seen poor investment decisions leaving taxpayers footing a big bill.
“We can’t afford to wait until a council is on the brink of collapse to act. That’s why we want to bring in new powers so we can identify the risks and act before its too late.”
The government is consulting on introducing Capital Risk Metrics, which create a statutory framework allowing ministers to intervene “in exceptional cases where a local authority’s borrowing or investment activity is leading to excessive financial risk.”
The legislation allows the government to issue “risk-mitigation” directions to an individual authority when it is at the point of becoming financially unsustainable, or breaches a risk threshold.
Work and Pensions Committee chair: Neets crisis is not due to ‘snowflake’ generation
Work and Pensions Committee chair Debbie Abrahams MP has responded to the publication of Alan Milburn’s interim findings from his review on youth inactivity and unemployment in the UK.
Abrahams says:
“Many of Alan Milburn’s findings reflect the evidence received in our own inquiry on Youth Employment, Education and Training. We await Mr Milburn’s conclusions and recommendations, but when giving evidence to the Select Committee, he referred to the causes of the current youth employment crisis being as broad as they are deep. It’s clear that whatever his recommendations, it will require systemic change, needing a whole government approach to fix this.
“We agree that this is not the so-called ‘snowflake’ generation that too many have referred to. But the urgency must be recognised. We cannot see the lives of so many young people be blighted in this way.
“The young people my committee has spoken to as part of our inquiry have shown a real desire to work, to succeed. But too often they have experienced barriers that aren’t properly understood by the DWP. Having the right support in place to enable these young people to thrive will be essential.
“Reforming the social security system that recognises these barriers and provides the support that is needed is essential. We’re concerned by the signals sent in the latest supplementary estimates that include an apparent £78m cut to Connect to Work, designed to reduce barriers for disabled people, including young disabled people, who want to get into work. Our research also shows that every extra pound spent on employment support will pay for itself 6 times over and give people their independence.
However, we’d urge against unhelpful comparisons between money spent on benefits and that on employment support. It introduces the notion that merely shifting financial support from one to the other will solve the problem. Without careful navigation this could potentially undermine youth employability by driving up child poverty or exacerbating underlying health conditions.
“We must not allow people’s futures to be determined by anything other than their talent.”
Vape shops but no jobs: one young man’s search for work in Grimsby
This video, from my Guardian colleagues, shows how the Neets crisis is playing out in Grimsby, where 19-year old Cohen is desperate to find a permanent job while running a mascot hire company and chasing his dream of becoming a professional wrestler:
For the past year, Cohen, who has a learning disability, has been applying for roles in holiday parks, retail, charity shops and even the local football club Grimsby Town FC, which was recruiting for a new mascot.
He is volunteering at a local Scope charity shop once or twice a week and is starting a placement through college working at Morrisons. He has yet to find paid work, though not for want of trying.
Cohen says:
“Retail was a big thing for a lot of people [here in Grimsby] at one point.
But a lot of its closing down now. It’s now made up of vape shops and barbers and not ones where you can get a job.
Updated
Employers’ biggest complaint about young people is their ‘work readiness’, Milburn continues, emphasising the importance of work experience.
He tells Radio 4:
Just a few days ago, we were talking to Marks and Spencers, to John Lewis, to all of these employers. And the biggest complaint that people have is about what work readiness.
They know that the young people have got qualifications. What they worry more about is whether schools have gifted them the attributes that are needed for the workplace. And that is all about communication, collaboration, agility, adaptability, skills.
We do badly internationally when it comes to work experience. We’ve got to change it.
Milburn is due to release recommendations to fix the Neets crisis in the autumn. That could potentially include compulsary work experience for young people, as the boss of Amazon UK called for this week.
Milburn: UK's 'chronic' Neets problem is worse than other countries
Q: Is the Neets problem worse in the UK than in other countries?
Yes it is, Alan Milburn replies.
The UK’s Neets rate is three times as high as in Holland, and twice as high as Ireland, he says. Britain has moved down the international league table in recent times.
He calls it a “chronic problem” that is getting worse not better, with no plan to deal with it.
Young people are caught in a “perfect storm”, he continues, where the first rung on the career ladder is further out of reach for them.
The number of jobs in low and medium-skilled occupations have declined by over a million over the last 20 years. Apprenticeship starts are down by about a third in the last ten years, and the Saturday job has disappeared, Milburn points out.
That’s compounded by a welfare system created to deal with “yesterday’s problem” of cyclical youth unemployment. Today, the challenge is “youth detachment”, he adds.
As Milburn puts it:
People always talk about welfare and they’re right to do so. But this is a problem in the labour market, in the welfare system, in the school system, in the skills system and in the health system.
It’s not reforms that you need. It’s a radical reset.
Milburn: the silence kills hopes for Neets
Alan Milburn is discussing his new report into the Neet crisis now, on Radio 4’s Today Programme.
Milburn emphasisis that the UK risks a “lost generation” of young people out of work, training or education, with many being rebuffed when they apply for work, or never even hear back.
Milburn says:
It’s the silence that kills, it dents confidence. But more importantly, it kills hope.
He adds that 84% of the Neets his team surveyed actually want to be in work or training :
There’s no shortage of effort on their part. Now the shortage is of opportunity and of support.
Updated
New data from Zoopla this morning highlights the affortability challenges facing first-time buyers, showing:
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First-time buyers are targeting homes worth £10,000 more than a year ago, with average prices up 4.3% to £254,750 — nearly 3x the rate of UK house price growth
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There are 6% fewer first time buyers in the market than this time last year.
Milburn correct to reject “lazy tropes” around youth unemployment
Economists have been welcoming Alan Milburn’s report into the UK’s Neets crisis, even before its official launch later today.
George Bangham, head of social policy at the New Economics Foundation (NEF), has said Milburn is correct to reject the “lazy tropes” about this problem somehow being young people’s own responsibility, adding:
“Most young people want to work, but too few jobs are available to them in many local areas, as NEF research has shown. Job vacancies are at their lowest level in 12 years, outside of the pandemic lockdowns – and young people are struggling more than others to land the few jobs available.
The Resolution Foundation thinktank says Milburn is correct to identify “rising ill health, limited vocational education, a hands-off benefits system, and a weak labour market” as key drivers of the UK’s NEET rate.
Lindsay Judge, research director at the Resolution Foundation said:
“It is encouraging to see how strongly the Milburn Review’s interim report recognises the gravity of the UK’s Neets crisis. Our ambition should be that the UK becomes one of Europe’s lowest Neet countries rather than one of its highest.
“The report has grasped the key drivers of the UK’s high Neet rate, and the steps needed to tackle these: more engaged employment support, early intervention on mental health, and a greater focus on further education.
“But there are real fiscal and structural challenges ahead. There is no single system currently in place to solve this crisis, so the Government will need to develop a new approach that spans government departments as well as regional and local authorities, plus find the funding to truly turn the Neets crisis around.”
First-time buyers facing toughest challenge since financial crisis
UK home ownership is increasingly out of reach for young people, David Thomas, the outgoing chief executive of Barratt Redrow is warning today.
In an interview with the BBC, Thomas says that now is one of the most difficult times to get on to the housing ladder, comparable only with the aftermath of the financial crisis in 2008.
Thomas blamed rising interest rates, student loan deductions and the squeeze on real wages for making it harder to buy a new home in 2026, saying:
Certainly it’s going to be close to where we were [after] the great financial crisis.
That was probably more to do with lending, but I think it’s very, very comparable for first-time buyers. We’re now facing challenges around affordability with no government support scheme in place.
Updated
Introduction: UK risks ‘lost generation’ without more jobs for young people
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Younger people in the UK are facing a double whammy of economic pain – with rising numbers no longer in education, employment or training, and an increasingly tough battle to get onto the housing ladder.
Alan Milburn, the former health secretary, is publishing an important review into why so many young people in Britain are economically inactive – it warns that one in six young people (or 1.25 million) could not be in education, employment or training within five years unless “urgent” action is taken.
Milburn, who has been looking at the problem for months, will pin the blame firmly on the system rather than young people themselves.
He’s expected to say:
“This is not a failure of young people. It is a failure of a system stuck in the past. Whether it is education or health or welfare, that system fails to enable their participation in the labour market.
“Instead, all too often it ends up putting young people on a path to a life not in jobs but on benefits. This should be the priority for the government. It should be the priority for all of us.”
To tackle the risk of a “lost generation”, Milburn is pushing for employers to be given more incentives to take on young people. That would give them a leg-up into the world of work, dodging the “Catch-22” situation where employers ask for work experience before giving someone a job.
The Milburn review will also make the case for reforming health and disability benefits, arguing that the welfare state is “exacerbating inactivity”.
Another factor is the decline of the “Saturday job”, following a drop in entry-level jobs and opportunities in hospitality, leisure and retail, and a fall in apprenticeship starts over the last 10 years.
New data this morning will show if the Neets crisis is getting worse, as my colleague Richard Partington explains:
Experts have warned of a crisis in youth jobs, with official figures due on Thursday expected to show the number of young people not in education, employment or training (Neet) is close to breaking through a million – the highest level for more than a decade.
Milburn will warn that without urgent action the number could continue rising from one in eight young people who are classified as Neet to one in six within five years – representing 1.25 million young lives.
Young people who manage to overcome the barriers of unemployment still find it very hard to buy a house.
David Thomas, the outgoing chief executive of Barratt Redrow, has warned that first-time buyers are facing one of the most difficult times to purchase a home, due to affordability challenges (more on this shortly….).
The agenda
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9.30am BST: Latest quarterly estimates for young people (aged 16 to 24 years) who are not in education, employment or training (Neet) in the UK
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10.30am BST: Former Health Minister Alan Milburn to hold press conference on his review of the Neets crisis
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1.30pm US PCE inflation report for April
Updated
