Last month's UK unemployment data release brought welcome falls in headline rates of unemployment.But, don't get too carried away about this welcome news.
As XpertHR's June 2012 economic commentary article notes, the fall in the headline measures of unemployment was almost entirely the result of the ongoing rise in levels of part-time work, at the expense of full-time jobs.
There is a consensus among economic commentators that - despite these falls in headline unemployment rates - unemployment in the UK has yet to peak.
UK unemployment has yet to peak, forecasts suggest
Here is a round-up of latest unemployment forecasts:
- The BCC predicts "that UK unemployment will increase from 2.625 million (8.2% of the workforce) in Q1 2012, to 2.9 million (9% of the workforce) in Q3 2013."
- The CBI expects unemployment to peak at 8.9% in Q1 2013. Unemployment will average 8.6% in 2012 and 8.8% in 2013.
- The European Commission says "the [UK] unemployment rate is [...] likely to increase slightly in 2012, to peak at 8.5% before edging back to 8.4% in 2013."
- Evenbase paints a bleak picture of prospects for the UK labour market in 2012: "People remain gloomy about their current job situations, especially those in older demographics; the number of vacancies is dropping; and most of the positive recruitment trends that we traditionally see in January and February have proved hard to find."
- Lloyds
expects "unemployment to peak at close to 9% by early next year."
- NIESR: "The unemployment rate will rise to about 9% this year and remain high throughout the forecast period. Elevated unemployment for such a long period is likely to do permanent damage to the supply side of the economy, with large long-run economic costs."
Unemployment crisis across Europe...
Unemployment remains uncomfortably high across Europe, with the Eurozone jobless rate holding steady at 11% in April
2012, according to latest data from eurostat.
These unemployment data appear to conform to the pattern suggested by recent research from the International Labour Organization (ILO), which argues that higher unemployment rates tend to be seen in those countries which have enacted the most severe austerity measures (with particularly high rates in the countries in Southern Europe, which are subject to the harshest austerity measures).
See also:
- XpertHR economic commentary June 2012: The austerity trap XpertHR's June 2012 economic commentary examines the theory that austerity measures could be endangering recovery in the UK and other European economies. It also includes latest data relating to pay awards, inflation and unemployment, and consider how UK HR departments are coping with the ongoing challenges of the harsh economic climate.
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