If you collect debts in the UK, today’s jobs numbers are a warning light: when unemployment rises and wage growth slows, arrears usually follow. And with credit card borrowing costs hitting fresh highs, the “can’t pay” segment can grow fast.

What happened

1. UK unemployment rose to 5.2% in Q4 2025, the highest since early 2021.

2. Youth unemployment (18 to 24) reached 14%, a 5-year high and described as a joint 10-year high excluding the pandemic period.

3. Pay growth slowed, and the market reaction was immediate: traders increased expectations that the Bank of England could cut rates in March, with money markets pointing to around a 75% chance of a cut to 3.5%.

4. Separately, the average credit card purchase APR was reported at 35.8% in February, the highest since records began in June 2006.

Why ...