Unemployment 'will hit 2.75m'

Mon Nov 2 2009 05:42:12

Unemployment in the UK is set to hit 2.75 million by November next year, new research claims.

The figure, estimated by accountants BDO, is a considerable increase from the 2.47 million people who are currently out of work.

The group said that after falling for several months, its employment index had levelled off at 93.6 in October, virtually unchanged from the previous month, suggesting firms were holding on to staff in readiness for the recovery.

But public sector employment levels are set to start falling as the Government is forced to introduce cost cuts, leading to further increases in unemployment in late 2010 and beyond, it said.

The group added that its output index suggested that a strong upturn may still be some way off, as groups failed to grow their order books.

Meanwhile, separate research showed that small and medium-sized companies are feeling their most optimistic since April 2007 following signs that demand for their goods may be stabilising.

Four out of ten of the firms reported a decline in new orders during the three months to the end of October, but 24 per cent said they had seen a rise, according to the CBI.

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