LONDON: Unemployment in Britain will peak at 2.8 million people in 2010 as the recession forces more companies to slash jobs and cut costs, according to a study published on Tuesday.The Chartered Institute of Personnel and Development (CIPD), an employment organisation that represents managers and personnel staff, warned in an annual report that Britain would face a “sting in the tail” of the recession.
“The CIPD warns of a sting in the tail of the recession with a winter rise in redundancies as employers assess prospects for the economy in the coming year and decide that they will need to raise productivity and reduce labour costs,” the group said.
“The CIPD’s forecast is that the number of people in work will fall by 250,000 between the third quarter of 2009 and the second quarter of 2010, with unemployment rising to a peak at 2.8 million next summer,” it added.
However, that was a large improvement on the CIPD’s previous forecast that unemployment would peak at 3.2 million in mid-2010.
Recent official data showed that the number of unemployed rose by 21,000 to 2.49 million people in the three months to October — which was the highest level since early 1995 but also the smallest gain for 18 months.
Although Britain is the last major world economy still in recession, the country is expected to have returned to growth during the fourth quarter, or three months to December.
The CIPD added Tuesday that its latest forecasts assumed that the British economy recovered in line with current market expectations.
“A slower-than-expected recovery or stronger earnings growth would threaten to raise peak unemployment to at least 3 million,” added John Philpott, chief economic adviser to the CIPD. — AFP