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16 January 2012
The Chartered Institute of Personnel and Development (CIPD) has produced its Annual Barometer report this month forecasting that the unemployment situation in the UK is set to worsen with the prospect of almost 3 million people unemployed by the end of 2012.
This shows a continuation of the 'productivity pause' and severe pay restraint that has characterised the UK economy since the recession of 2008-9. Chief Economic Adviser at the CIPD, Dr. John Philpott, said:
"The combination of worsening job shortages for people without work, mounting job insecurity and a further fall in real earnings for those in work may test the resilience and resolve of the UK workforce far more than it did in the recession of 2008-9, and foster a tetchy 'passive-aggressive' mood in many workplaces that could prove very hard to manage."
Forecasting a further 120,000 people are set to lose their jobs this year, the report goes on to detail how this would be the highest number of people in unemployment since 1994, and the highest rate of unemployment (8.8%) since 1995. However, Dr. Philpott explains how the job market is in a worse situation now:
"Unemployment in the coming year will be rising from a much higher starting point, so the UK jobs market in 2012 will be weaker than at any time since the recession of the early 1990s."
Whilst Government measures to tackle headline youth unemployment, reducing it to 0.92 million, this should have no net effect on total unemployment in 2012, which is set to reach 2.85 million. Dr. Philpott went on to say: "This forecast is not as gloomy as it might be in a near stagnant economy since CIPD surveys of employers as yet detect no sign of an imminent widespread surge in private sector redundancies, though that remains a serious risk given the fragile state of business confidence.
"However, at some point private sector businesses will need to raise labour productivity back to more normal levels. If, as we currently forecast, the productivity pause isn’t brought to an end by a much higher rate of redundancies in 2012, employers will inevitably be slow to recruit staff when the economy eventually picks up."
ENDS
Article reproduced with the kind permission of The Chartered Institute of Personnel and Development (CIPD). Sourced: 2012-01-16
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