Former MPC member latest to forecast rise in unemployment

| June 16, 2009

David Blanchflower, the former member of the Bank of England’s Monetary Policy Committee (MPC), believes job losses in the UK are set to soar, with unemployment among the young becoming a “national tragedy”.

Mr Blanchflower’s bleak forecast comes ahead of unemployment figures, due to be released tomorrow.

Furthermore, other reports out today have revealed some alarming results with regard to unemployment with the TUC forecasting that unemployment will continue to rise until the end of next year - long after economic recovery.

In addition, the Chartered Institute of Personnel and Development has warned of significant job losses in the public sector over the next five years.

According to the organisation, as many as 350,000 jobs could be lost within the sector between now and 2015.

Meanwhile, Mr Blanchflower who made a CBE in the Birthday Honours last week, told the BBC that the number of jobless is going to rise by hundreds of thousands a month, more than double recent monthly rises.

Mr Blanchflower, who correctly predicted the recession, said: “People, I think, are going to be shocked for several months to come about the scale of the increases in unemployment.”

“Unemployment is going to go up, well over three million and it’s going to interact in places with negative housing equity - these are really tough times ahead.”

Mr Blanchflower said his concern is that by September, a million people under the age of 25 will be unemployed.

He believes this is because companies are not recruiting any staff and this is particularly affecting the younger generation.

His gloomy outlook comes as many commentators believe the recession has ended or is coming to an end after positive reports of green shoots.

Mr Blanchflower, who is professor of economics at Dartmouth University in the US, warned in November 2007 that the UK may face a recession and has recently cautioned that “the worst of the downturn is not over and signs of improvement may be ‘false dawns‘.”

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