The rise of robots is wiping out entry-level jobs, the Bank of England has warned, as figures showed youth unemployment at an 11-year high.
A regular business survey conducted by the Bank said the use of artificial intelligence and automation was enabling firms to grow without any extra workers.
In some cases it means fewer ‘early career’ or graduate roles are created.
Labour has also made it much more expensive to take on workers after hiking employer National Insurance and announcing steep increases in the minimum wage for 18 to 20-year-olds, plus a raft of new workers’ rights.
Yesterday the Bank said many organisations ‘report automation and AI-enabled productivity gains are allowing them to meet demand without additional hiring’.
In such cases, the time taken to carry out ‘highly automatable’ tasks has fallen by around 70 per cent, firms estimate.
‘For some large professional services firms this is contributing to reduced demand for early-career recruitment, including graduates, driven both by cost pressures and a lower volume of routine entry-level work,’ the report said.
Meanwhile, younger people are shunning trades, manufacturing and farming jobs, it added, leading to an ageing workforce and concerns about who will replace them.
It came as the Office for National Statistics said unemployment remained at 5.2 per cent in the three months to January, the highest since the pandemic. The jobless rate for 18 to 24-year-olds jumped from 14 per cent to 14.5 per cent, the highest since the three months to January 2015, representing 598,000 people.
The rise of robots is wiping out entry-level jobs, the Bank of England has warned. Pictured: A robot demonstrates a task at the NVIDIA booth during the NVIDIA GTC global AI conference in San Jose, California, U.S., March 17, 2026
James Cockett, senior economist at the Chartered Institute of Personnel and Development, said the jobs market has become ‘increasingly challenging for young people’.
‘This is ahead of the significant uplift to the youth minimum wage rates, coming into effect in just two weeks’ time.’
The minimum wage for those aged 18 to 20 will jump by 8.5 per cent next month to £10.85 per hour. Professor Len Shackleton of the Institute of Economic Affairs think-tank cast doubt on a scheme to offer £3,000 to take on young people. ‘It would be much better if the Government reversed some of the job-destroying measures it has introduced in the last 18 months,’ he said.
Meanwhile, ministers have paused efforts to drive up the minimum wage for under-21s any further. In a letter to the Low Pay Commission, Business Secretary Peter Kyle said in light of ‘concerns regarding the youth labour market’, the priority is ‘the employment prospects of young people’ over further rises in pay.
