David Blanchflower predicts unemployment could reach 4 million
David Blanchflower, one of the more publicly recognised policy makers in the Bank of England, has given a warning shot to the government that unless evasive action is taken in order to tackle the recession head on, by spending in excess of £90bn on new projects, unemployment may reach unthinkable levels of 4 million.
The plan for government spending could be used on education initiatives and state-funded construction and other projects that will be focused on protecting jobs.
Unemployment may double as the pound is falling and Blanchflower’s statement has even more strength given the fact that he originally and correctly predicted the scale and depth of the economic crisis.
There has already been an increase in unemployment related government spending and this is expected to exceed pre-budget report projections, although the current crisis and potential problems are long term consequences that will affect the UK in decades to come.
Across many industries firms have had to lay off workers how have valuable skills and this may have permanent costs to the UK economy is the government does not tackle this issue.
The government has been urged by many analysts to do more to help the 18-24-year age group who have been suffering disproportionately as unemployment in this age group is double the overall unemployment figures.
The number of people out of work and claiming benefits had soared at the fastest rate on record and that fact that 40 percent of the unemployment are under 25 is a worrying trend that could leave very painful scars.
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