from the Telegraph
link:
http://www.independent.co.uk/news/b...xed-as-city-forecasts-3m-by-2010-1012491.html
More than 5,000 job losses were announced yesterday by some of the UK's leading companies, ahead of new official figures that are expected to show the highest number of people out of work since 1998 â and well on track to exceed two million by Christmas.
Some City economists predict that unemployment will top three million by 2010; Capital Economics say that the British economy will shed 1.5 million jobs before the recession is over.
The jobs news and the increasingly grim forecasts will intensify pressure on the Government to announce a substantial package of tax cuts and public spending increases when the Chancellor delivers his pre-Budget report, expected within the next week or two.
The Tory leader, David Cameron, yesterday set out his £2.6bn scheme to offer a national insurance break of £2,500 to companies that take on workers who have been unemployed for more than three months.
Today, the Bank of England will publish its latest growth forecasts in its quarterly inflation report, which is widely expected to confirm that the UK is heading for a more serious recession than previously assumed. The FTSE 100 index of leading shares fell by 3.6 per cent on heightened fears of a deep recession.
The decline of the workforce is moving beyond the financial and construction sectors, whose difficulties have been well publicised, into more hi-tech parts of the economy.
The largest loss of jobs will be at the cable group Virgin Media, which said it was axing about 2,200 British jobs by 2012. Virgin Media has 76 offices across the UK, including major bases in London, Edinburgh, Nottingham and Sheffield. The Communication Workers Union said it was "shocked and disappointed" at the job losses. Virgin Media said they were due to a post-merger restructure.
About 1,300 jobs are scheduled to disappear at Yell, the company behind the Yellow Pages directories, over the coming year. The Yell chief executive, John Condron, said the job cuts were in readiness for continued tough trading conditions. "Global economic trends show no sign of improving; therefore, we are actively working on further cost reduction programmes that will primarily benefit next year."
GlaxoSmithKline, the UK's biggest drugs group, unveiled plans to close its factory at Dartford, with some 620 jobs to go by 2013. The pharmaceutical sector is known for being one of the most robust during a recession but that will come as little consolation for the employees in Dartford, whose fate has been sealed by the loss of patent protection for two of the group's biggest-selling treatments and the continuing economic downturn.
Analysts say that only the public sector will see much expansion in employment over the next year or two. Cuts in interest rates and government tax and spending measures will take months to feed through fully to the economy.
Almost every corner of the economy is now feeling the effects of the collapse in consumer confidence and the restriction of bank finance. Manufacturing has been in recession since the summer and the British motor industry has been hit especially hard. Job cuts so far have been limited but short-time working has been announced at almost all of the major companies â Nissan, Honda, Land Rover and Ford being the most prominent.
Few economists expect the employment scene will improve quickly and most anticipate a large rise in the jobless rate when the Office for National Statistics releases the figures today. Last month saw the steepest rise in unemployment for 17 years, with the workless total soaring by 164,000 in the three months to August, leaving unemployment at 1.79 million, or 5.7 per cent. The numbers this autumn are likely to be swelled by school-leavers facing the toughest jobs market in more than a decade.
Vicky Redwood, a UK Economist with Capital Economics, said: "The downturn in the labour market is well under way. We expect employment to drop by around 1.5 million from peak to trough (ie, from mid-2008 to end-2010), with the consumer services sector set to see the biggest absolute drop in headcounts."
Better news for the economy, though not necessarily for household budgets, may arrive with the pay-rise figures due today. They are expected to show an even more moderate rise, as fear of unemployment stifles wage demands.
DEPRESSION UK, GOD SAVE THE QUEEN