CIPD revise growth and unemployment forecasts

| July 13, 2011 | 0 Comments

The Chartered Institute of Personnel and Development (CIPD) has today provided an assessment for the UK economy.

It has revised its growth forecasts to 1.4% for the 2011 year, down from its previous estimate of 1.6%.

The estimate is roughly in line with other forecasts after the International Monetary Fund recently said the UK economy would grow by 1.5% this year, while the British Chambers of Commerce expects growth of 1.3%.

The Organisation for Economic Cooperation and Development is estimating 1.4% but there is a more optimistic 1.7% from the Office of Budget Responsibility (OBR).

The OBR was set up by the coalition Government to assess the state of public finances.

Growth forecasts have been slashed over the last few months after the Government’s harsh spending cuts have hampered growth.

In the meantime, the Institute expects the unemployment rate to peak at 8.7% (2.7 million) in mid-2012 rather than 9.5% as previously forecast.

Today, the Office for National Statistics (ONS) revealed UK unemployment fell further in the three months to May.

The ONS said unemployment fell by 26,000 in the three month period to 2.45 million.

The latest figures means the unemployment rate remained flat at 7.7%.

However, the CIPD warned that the outlook for jobs would deteriorate if economic growth is slower than forecast and/or the rate of pay rises accelerates, which would put pressure on firms to cut staffing costs.

Dr John Philpott, the CIPD’s chief economic adviser, comments: “Just as pay freezes and pay cuts protected jobs in the recession, the ongoing pay squeeze is helping our anaemic economy support employment.”

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