The unemployment rate across the 16 countries in the Eurozone has hit double figures, rising to 10% (external website), according to latest official data published today. The Eurozone therefore joins the US in what might be termed "the 10% club" when it comes to unemployment the US rate having broken the double-figure barrier in October 2009 (PDF format, 211K) (external website), and running at 10% as at December 2009).
In contrast, the UK appears to be faring surprisingly well - particularly given length and severity of recession (from which we have only just emerged by the very barest of margins). The UK's headline unemployment rate currently stands at 7.8% (subscription required) over the period September to November 2009, unchanged when compared with the rate for the three months to August 2009.
So why is UK unemployment comparatively subdued? With pay awards at very low levels, it appears that pay is taking much of the strain: UK employers and employees are agreeing to pay restraint as a means to stave off job losses.
Nonetheless, many economic commentators believe that the current lull in unemployment growth will be short-lived:
- The CIPD warns of a possible "sting in the tail of the recession" (external website) which could see unemployment top out at 2.8 million during 2010.
- Economist and former Bank of England Monetary Policy Committee external member David Blanchflower fears peak unemployment could be significantly higher still (external website). According to Blanchflower: "If a new government got in and started cutting public spending it could rise to four or five million."
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