Unemployment to Hit 2.7 Million

The think tank have said unemployment is likely to peak at 2.7 million in 2011, up from the current total of 2.5 million.

The growth projections are lower than those made by the government in last month's Budget.

Those projections see the economy growing by between 1% and 1.5% this year, and between 3% and 3.5% in 2011.

The think tank said cuts to public spending, which will be necessary for cutting the size of the budget deficit, will push growth lower than it otherwise would have been.

Consumer spending is expected to rise this year, but by only 0.3%.

Forecasts National Institute of Economic and Social Research (Niesr ) for the world economy as a whole are more optimistic, however.

It expects almost 4% growth globally this year, following the 1% fall in global output last year.

But it said that growth would be powered by developing economies including China, which has seen double-digit GDP growth over the last 12 months.

The recovery in the US and Canada is also likely to be stronger than in Europe, the think tank added.

Posted at 09:00AM May 02, 2010 by Marc Stenton in The Economy  |  Comments[0]