Young persons are being priced out of jobs as a consequence of minimal wage hikes, warns Bank of England official

The Bank of England has warned that young people are being priced out of work due to minimum wage increases. 

It comes as the unemployment rate among 16-24-year-olds has risen above Europe’s for the first time since records began in 2000. 

Catherine Mann, a senior Bank of England official, said the ‘substantial’ increases in minimum wage, which began under the Conservatives and has been continued by Labour had ‘manifested in unemployment’ for the young.

‘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 told the Telegraph.

‘The accumulation over three years of the rise in the national living wage for that group has been manifested in unemployment for that category of workers. Very unfortunate, but it is true. It is a fact.’

In the past three months the youth unemployment rate has jumped to 15.3 per cent compared with the EU’s 15 per cent, according to data published by the OECD. 

The Resolution Foundation, which is Labour’s favourite think-tank, has also cited minimum wage increases as a factor for pricing young people out of work.

It previously called for minimum wage to be slowed ‘to avoid pricing 18-20-year-olds out of work’. 

File image: The Bank of England has warned that young people are being priced out of work due to minimum wage increases

The think-tank said: ‘Young people are bearing the brunt of Britain’s jobs downturn’.

Meanwhile official figures have shown that the number of employees on payrolls was down 3,000 in December at 30.2million, and 184,000 lower than a year earlier.

And the overall unemployment rate stuck at 5.1 per cent between September and November, the highest level for nearly five years.

ONS director of economic statistics Liz McKeown previously said: ‘The number of employees on payroll has fallen again, with reductions over the last year concentrated in retail and hospitality, and reflecting ongoing weak hiring activity.’

She added: ‘While there was a slight increase in vacancies in the latest period, the overall number has remained broadly flat over the last six months, following a long decline.

‘Wage growth in the private sector has slowed to its lowest rate in five years while public sector wage growth remains elevated reflecting the continued impact of some pay rises being awarded earlier than they were last year.’