Brian Eastick's side fell behind just five minutes into the game in Donetsk when Denys Garmash put Ukraine, who hosted the tournament, ahead.
England fought back well, and Nathan Delfouneso had an headed effort ruled out for offside after 17 minutes.
The young Three Lions enjoyed lots of potential but failed to create many chances, and fell further behind when they again started slowly after the restart.
That may be a bit harsh in truth, as Dmytro Korkisho's free-kick left the goalkeeper Jason Steele with little chance.
Dan Gosling and Joe Bennett both had chances for England but it was not to be their day.