PwC’s Youth Employment Index tracks how countries employ and train young people, with this year’s focus on rising economic inactivity and the impact of widespread AI adoption in the workplace. It finds that the UK has dropped to 27th out of 38 OECD countries, reflecting a combination of rising youth unemployment - now at its highest level since 2020 - and higher levels of economic inactivity. A growing share of young people in the UK are inactive, driven by a larger pool of students and three-times as many inactive due to long-term sickness than in 2005, with mental health conditions identified as a key driver. The data does suggest that AI is unlikely to be the driving force behind the rise in youth unemployment, but early signs are emerging in AI-intensive sectors. With 1 in 8 people now classified as NEET, the report estimates reducing regional disparities in youth employment could boost GDP by around £13-26 billion. And for businesses, the challenge is shifting: it’s less about filling vacancies, and more about identifying and developing the talent needed to meet the demands of a changing workplace.