Economic forecasters warn of 3.8 million unemployed

Economic forecast warns of 3.8 million unemployed

The Centre for Economics and Business Research (CEBR) and the TaxPayers’ Alliance have joined forces to produce a doom-laden forecast for the UK economy.

A report published today highlights “the dangerous reliance of the Treasury on optimistic predictions of the future economy” and goes on to predict up to 3.8 million unemployed, in a worst case scenario.

Research backing the study tested government calculations for public finances for both a slower, shallower recovery than the Treasury is predicting and also for a “double dip” recession.

In the case of the “double dip” national debt could exceed £2.3 trillion, according to the analysis.

The authors of the report conclude that the Treasury could have radically underestimate national debt and unemployment figures as follows:

National Debt: The Government predicts national debt of £1.54 trillion by 2017/2018 while the CEBR’s double dip scenario puts national debt in excess of £2.34 trillion.

Even in a more moderate scenario the CEBR expects national debt to reach £2.1 trillion.

Unemployment: The Treasury’s projections for the economy put unemployment at 2.8 million in 2011.

The CEBR’s pessimistic scenario estimates a rise of up to 3.8 million and its moderate scenario sees unemployment reaching 3.2 million.

The report urges: “The Treasury must come clean about the risks they are running with the future of the economy and the public finances – the potential £800 billion of extra debt and 1 million extra unemployed cannot be ignored.”

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