Last month's unemployment data release made for depressing reading, with unemployment increasing on most measures, and youth unemployment passing the 'million milestone.''So what is likely to happen to UK unemployment levels in 2012?
Lack of confidence in recovery will hit UK labour market
Declining confidence means the UK unemployment situation could be about to get a lot worse, argues Sunday Times Economics Editor David Smith:
Firms have been betting on recovery. They did not want to get rid of workers only to have to hire them again when things picked up. They were keen to recruit, so as to be well placed as the recovery built up momentum. [W]hat we have seen in recent months, I fear, is capitulation on both fronts. Businesses that hoarded labour have come to regret it and are now throwing in the towel. Those that recruited are no longer doing so and in some cases are laying people off. Confidence in the recovery has evaporated, and with it the hopes for many in the job market.OBR: Additional public spending cuts mean significantly higher job losses
The UK's labour market situation will also be worsened over the coming years by a drastic increase in predicted levels of public sector job losses, according to the OBR. As a direct result of additional public spending cuts set out in Osborne's Autumn Statement, the OBR now expects "a fall of around 710,000 in general Government employment" over the period between January 2011 and the first quarter of 2017. The OBR says:
General government employment is expected to fall further than we predicted in March, primarily because of the additional spending cuts pencilled in for 2015-16 and 2016-17 in the Autumn Statement. There is some evidence that public sector employers are front-loading expected job reductions.As Personnel Today's Laura Chamberlain notes, "this compares to the OBR's previous prediction of a loss of 400,000 public sector jobs for the shorter period running from the first quarter of 2011 to the start of 2016."
UK jobs market takes turn for the worse, REC finds
The outlook for the UK's jobs market has taken a turn for the worse, according to latest data from the Recruitment and Employment Confederation (REC) out today (Wednesday 7 December 2011). REC Chief Executive Kevin Green commented on its findings via Twitter:
Report on jobs out.Worst perm figures for over two years. Some sectors eng and IT doing well and temp Market holding up.The REC report finds "that permanent staff placements decreased for the second month running in November [2011]. Although moderate, the rate of decline quickened to the sharpest since July 2009. Contributing to the reduction in placements was an easing in the rate of growth of permanent job vacancies to a 25-month low."
REC Chief Executive Kevin Green comments:
[Our research] highlights a rapidly declining jobs market. The market has been slowing since May but this slowdown has accelerated in the autumn. This is being driven by the double whammy of falling business and consumer confidence. This is bad news for those out of work and, as a consequence, we expect unemployment to rise in December and January. On a positive note, however, the report shows that temporary staff appointments are still growing, albeit at a decreasing rate.
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