Jobs crisis London: Young people excel in education but struggle to find work, new report reveals

Many young Londoners are leaving education with excellent results but are then finding it difficult to find work , a new report is warning.

The study by Centre for London highlighted increasing challenges in getting a job in the capital which is threatening to get worse with the impact of artificial intelligence and Andy Burnham’s devolution revolution which will see thousands, if not tens of thousands, of posts moved out of Whitehall.

London already has the highest unemployment rate in the country , at 6.5% in the three months to June.

For young Londoners, aged 16 to 24, unemployment was at 19.6%, the highest for 11 years outside the Covid pandemic.

Business chiefs partly blame the jobs crisis on the £20 billion hike in National Insurance for employers imposed by former Chancellor Rachel Reeves which particularly hit sectors which employ large numbers of people on low incomes including hospitality and retail.

The new research, published ahead of the latest figures on Neets (people not in education, employment or training), outlined how in 2025, just 41.3% of Londoners aged 16-35 were in work, compared with 51.5% across England.

This jobs gap exists despite London outperforming other parts of the country on school attainment.

In the same year, 70.4% of young Londoners achieved a GCSE or similar level 2 qualification by age 16, compared with 61.1% in Greater Manchester, 62.7% across the Oxford-Cambridge region and 57.6% in the West Midlands.

But, while 80% of London school leavers found a further education course, employment or an apprenticeship for at least six months in 2022/23, only 17% moved into a sustained apprenticeship or employment.

The equivalent figures were 25% in Greater Manchester, 23% in the West Midlands and 30% across Oxford-Cambridge, the study added.

Work and Pensions Secretary Pat McFadden during a visit to a Boots warehouse to meet young people starting jobs as part of the 'Jobs Guarantee' scheme PA It stressed that the capital’s labour market has become more difficult for young people seeking work.

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Online job adverts in London fell from more than 273,000 at their peak in May 2022 to just under 98,000 in February 2026, a drop of 64%.