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December 29, 2010    

CIPD: Unemployment to hit 2.7 million

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by Kay Murchie
”CIPD:

The Chartered Institute of Personnel and Development (CIPD) has provided a gloomy assessment for UK unemployment, suggesting it could hit a 17-year high of 2.7 million next year.

The latest figures from the Office for National Statistics (ONS) show UK unemployment at just over the 2.5 million mark - at a rate of 7.9%.

However, the leading business group said the unemployment rate will reach 9% as a result of the Government’s spending cuts which will see hefty job losses in the public sector.

The Institute’s prediction is far worse than that of the Office for Budgetary Responsibility (OBR) - the independent body set up by the coalition Government to assess the state of public finances.

Last month, the OBR said unemployment will peak at just over 8% in 2011 and will fall gradually to just over the 6% mark by 2015.

John Philpott, chief economic adviser to the CIPD, comments: “If all goes well and the unexpectedly strong progress made in 2010 is sustained, the jobs market will be able to cope with the impact of the coalition government’s spending cuts and tax increases without any significant rise in unemployment.

“However, things only have to turn out a bit worse than expected in the wider economy for the jobs situation to weaken, which remains the CIPD’s central forecast.”

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