Economic forecasters warn 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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