Unemployment 'could top 3m'

Wednesday 17th December 2008

Bank of England economist David Blanchflower has warned unemployment is likely to rise above three million in the current recession.

The Guardian reports Mr Blanchflower, who is a member of the monetary policy committee that sets the interest rate, made the comments in an article for the Royal Economic Society's January newsletter.

Mr Blanchflower wrote: "I expect unemployment to continue to rise through 2009 and into 2010, probably to over three million.

"And I believe the impact of constrained credit conditions has yet to fully feed through to the broader economy, particularly to investment by firms."

The prediction has been echoed by other academics.

The Confederation of British Industry (CBI) predicts the number out of work will peak at around 2.9 million by mid 2010, while the British Chambers of Commerce (BCC) expects unemployment to peak in the third quarter of 2010 at around three million.

"We don't think unemployment will peak until 2011," Vicky Redwood from Capital Economics said, adding Capital Economics is predicting unemployment at its peak will leave 2.6 million jobless. ADNFCR-1783-ID-18934373-ADNFCR

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