OBR forecasts unemployment of 2.5 million until 2012
A few weeks ago the Office for Budget Responsibility published a range of supplementary forecast information – including a labour market forecast for unemployment and employment until 2016. While the new document breaks claimant unemployment rates, ILO unemployment rates and employment levels down by quarter, the totals appear the same as were indicated by the Budget’s forecast of annual change. But the new forecast also includes an important new column – ILO unemployment levels. This analysis provides three stark messages:
- ILO unemployment is expected to start to rise again at the end of this year, hitting 2.6 million (its highest level since the recession began) and remaining there until the third quarter of 2011.
- Unemployment is expected to remain at 2.5 million until early 2012.
- Even in 2016, unemployment is set to remain significantly higher than its pre-recessionary levels.
With evidence mounting that the OBR’s employment forecasts are already optimistic, this is further bad news for the UK’s jobseekers.