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Dole queues in Britain will take eight years to fall below levels at the start of the economic crisis, leading economists warned today.
The Organisation for Economic Co-operation and Development said unemployment would rise from 7.8 per cent to peak at 9.5 per cent, or nearly three million, in 2011. The think tank believes it will take until 2017 for the total to fall back to 5.5 per cent, about the level it was early last year.
Today official figures showed 10 per cent of 16- to 18-year-olds, or 261,000, are unemployed and not in education. This figure rises to one million among the wider 16- to 24-year-old group.
Shadow chancellor George Osborne said: "The shocking figures show Labour risks creating a lost generation."
Lib-Dem Treasury spokesman Vince Cable said: "We cannot simply condemn those who lose their jobs to the scrap heap. We are heading for a replay of the Tory recession of the Nineties, where unemployment rose long after the recession was technically over."
Gordon Brown said on ITV's This Morning that the Government had launched a series of schemes to help the unemployed, particularly young people. But the OECD warned that further "substantive" measures may be needed.
Joblessness has increased faster than in most other European economies because of a deeper recession and more flexible labour rules, it added.
But UK output has seen a smaller fall than in previous recessions, as firms have reduced working hours to retain employees.
The OECD said that because of this employment will fall "for some time" after the economy begins to pick up. It also warned that the Prime Minister should not dither in announcing plans to slash Britain's debt. This will almost certainly mean higher taxes, deeper public services cuts or both.
While nudging up its growth forecasts for the UK, the think tank said: "Once recovery takes hold, further consolidation is imperative."
The OECD predicted GDP in the UK would grow by slightly more than one per cent next year. The recovery would gain momentum in 2011.
The economists added that ultra-loose monetary policy and government measures have helped to support the economy. However, the economic forecast for this year was downgraded to say GDP will shrink by 4.7 per cent, against its June forecast for a contraction of 4.3 per cent.
The think tank added that the Government has no leeway to provide more stimulus to boost demand.
Reader views (1)
And yet our doors are wide open to immigration from third world countries, mostly with no skills or education, ELECTIONS PLEASE!
- Dirk Diggler, Soho, London, 20/11/2009 02:36
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