UK Jobs Being Crunched
Official labour market figures published earlier today by the Office for National Statistics (ONS) are far worse than expected. John Philpott, Chief Economist at the Chartered Institute of Personnel and Development (CIPD), says the winter will be woeful for jobs and that the Government's hard earned credibility for restoring full employment could be blown away in a matter of months.
Dr Philpott commented as follows:
"It's been an awful autumn so far for the economy and the jobs market is now being crunched. Today's official figures are dire - the 122,000 quarterly drop in the number of people in work and the 164,000 quarterly rise in unemployment underline the severity of the emerging jobs crisis. With a recession now almost certainly already underway we face the prospect of a woeful winter. If today's figures are a guide to what happens next, claimant unemployment will probably top 1 million by Christmas with unemployment on the government's preferred survey based measure heading for 2.25 million by next Easter at the latest. And that's likely to be the best we can hope for.
"According to the latest official figures, vacancies have fallen and more people are being made redundant. The number of people in full-time employment has fallen particularly sharply. Overall, young people aged 35 and under have borne the brunt of the most recent fall in employment. But there are signs that older people are starting to leave the jobs market too as employment prospects weaken.
"A real pay squeeze is adding to the jobs crunch. Pay rises have fallen back just as price inflation has surged. The combination of mounting job losses, heightened job insecurity and shrinking real incomes means people are hardly likely to be rushing out to spend - for the time being intensifying recessionary pressure in the economy. This adds weight to the case for further substantial cuts in interest rates even though the rate of inflation is well above the Government's target.
"The worsening jobs crunch presents the Government with a stiff test to its hard earned record on jobs. A decade of building credibility for restoring full employment could be blown away in a matter of months. To prevent this, ministers should consider measures to help people at risk of leaving work for welfare as well as beefing up measures targeted at those already jobless. In this context, yesterday's joint DWP and DIUS announcement of an extra £100 million to help retrain and develop the skills of people made redundant or already looking for work is welcome. It is essential for the future recovery prospects of businesses and the UK economy that skills development does not come to a halt."
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