UNEMPLOYMENT will continue to rise for more than a year regardless of whether the recession has come to an end, the TUC will warn in a report to be published today.
The umbrella organisation for Britain's unions dampened recent optimism that the country may have turned the corner with the economy showing fledgling signs of growth. And its warning was yesterday echoed by leading international finance figures.
International Monetary Fund chief Dominique Strauss-Kahn said the worst of the global economic crisis may be yet to come, warning G8 finance ministers who believed they had seen green shoots of recovery to remain "cautious".
Meanwhile, Erik Berglof, chief economist at the European Bank for Reconstruction and Development, speaking at a seminar in Gleneagles, said: "I don't think the worst is behind us. We've not seen everything yet."
And EU Competition Commissioner Neelie Kroes, who was also at the summit, said there remained a lack of trust in the banking system and there was "still something rotten in the closet".
By analysing official statistics and the experience of the last UK recession in the early 1990s, the TUC has calculated that the jobless total will continue to increase until autumn next year.
The Office for National Statistics will tomorrow publish the latest unemployment figures, with another increase towards three million widely expected.
Last month, it reported there were 2.2 million people unemployed in the UK, including 157,000 in Scotland. The UK unemployment rate currently stands at 7.1 per cent, with the total the highest since 1996.
The TUC claims the current recession is worse than that of the 1990s, with deeper falls in the nation's productivity, or GDP. Then, unemployment rose for 11 consecutive quarters – and took seven years to return to pre-recession levels.
This time, unemployment has only risen for five consecutive quarters – suggesting we may only be halfway through the effects of the crisis.
The new jobless figures will paint a picture of a public sector protected from the worst of the recession, but gearing up for 350,000 cuts in the next five years, according to the Chartered Institute of Personnel and Development (CIPD).
Chief economist John Philpott, said: "Predictions of reduced pain in the jobs market, and a lower peak in the jobless totals, are premature.
"The public sector has yet to feel the full impact of the recession, and the resultant bloodbath in the public finances. The CIPD's current estimate is that the fiscal squeeze implied by government plans will result in a total of 350,000 job cuts in the public sector."
Last week, a think-tank, the National Institute for Economic and Social Research, calculated that the economy had begun to grow again in April and May.
Other positive signs included an increase in manufacturing and a modest rise in house prices. But TUC general secretary Brendan Barber said: "Some now say that we have a recovery, but even if this is not a false dawn, as others fear, it will be years before the thousands of people who have lost their jobs or who will lose them in months to come will see anything to celebrate.
"That's why tackling unemployment must remain the government's number one priority. Speeding up the process of getting people back into work and into jobs with decent pay will benefit the two million people currently out of work."
Chancellor Alistair Darling has stated that the UK will come out of recession by the end of the year. He has claimed the country is in line for a V-shaped recovery – where the economy pulls out of the recession as quickly as it had collapsed.
The full article contains 619 words and appears in The Scotsman newspaper.
