Unemployment to peak at 2.8 million
UNEMPLOYMENT will peak at 2.8 million next year – down from previous predictions of more then three million, according to a new forecast.
However, business group the Chartered Institute of Personnel and Development believes unemployment will continue to rise for the first six months of the new year, despite the recovery in the UK economy.
Earlier this year the CIPD said it expected unemployment to peak at 3.2m as a result of the recession.
At present, 7.9% of the population – 2.49m people – are unemployed. The CIPD has predicted that a further 250,000 jobs will be lost in the UK before the second quarter of 2010.
But improvements in the general economic outlook will mean the jobs market is not expected to suffer as much as previously thought.
But for those still in work, below-inflation pay rises are expected, the CIPD added.
Dr John Philpott, chief economic adviser to the CIPD, said that lower pay rises would be necessary to stop employers cutting further jobs and keep unemployment below three million.
Dr Philpott also warned that unemployment could also rise higher if the UK economy failed to recover as expected, or the government imposed deeper spending cuts.
