Unemployment falls, for now
Jul 14 2010
Employment prospects remain grim, despite uplift in job stats
Joblessness in the UK dropped by 34,000 in the three months to May to 2.47 million.
Unemployment now stands at 7.8 per cent, down from 7.9 per cent, according to the Office for National Statistics. The number of people claiming jobseeker's allowance also fell by 20,800 to 1.46 million.
Owen James, economist at the Centre for Economics and Business Research, says: ‘Taken at face value it may appear that there has been a halt in the deterioration of the labour market, but ignoring the impending cutbacks in the public sector would be languid. Like the Office of Budget Responsibility, we see public sector employment falling by approximately 600,000 between 2012 and 2015.’
The CEBR says private sector recovery is likely to take place at a slow rate, with unemployment rising to nearly 9 per cent in 2014, instead of the OBR’s forecast of 6 per cent.
John Philpott, chief economic adviser at the CIPD, says: ‘Against the backdrop of massive public sector job downsizing it won’t require anything like a double-dip recession to cause a serious prolonged jobs deficit, merely economic growth in the range of 2 to 2.5 per cent per annum rather than the 2.5 per cent figure the OBR expects.
‘A slightly milder growth outcome would leave unemployment still close to 2.5 million by 2015, meaning Britain faces at least half a decade of serious prolonged jobs deficit.’
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