‘Unemployment to hit 17-year high’

UNEMPLOYMENT will increase to a 17-year high of 2.7 million in the coming year according to the  Chartered Institute of Personnel and Development (CIPD).

The CIPD forecasts 120,000 jobs will go in the public sector and another 80,000 from private enterprise. It said 9% of those eligible to work will be out of work, up from the current level of 7.9%.

John Philpott, chief economic adviser to the CIPD, said: “If all goes well and the unexpectedly strong progress made in 2010 is sustained, the jobs market will be able to cope with the impact of the coalition government’s spending cuts and tax increases without any significant rise in unemployment.

“However, things only have to turn out a bit worse than expected in the wider economy for the jobs situation to weaken, which remains the CIPD’s central forecast.

“Either way, this doesn’t mean that we are facing a return to the dire recession days of late 2008 and 2009, but nonetheless 2011 will probably feel like another year in the economic doldrums, rather than the start of a return to prosperity.”

The CIPD also predicts average earnings to rise by 2% in 2011. According to official figures unemployment currently stands at 2.45 million.