Unemployment in the United Kingdom, which remained impressively resilient in recent months despite weakening economic activity, is likely to increase later this year and in the early months of 2013, IHS Global Insight Chief UK and European Economist Howard Archer said.
The economist noted that the ongoing resilience of the job market has been supported by restrained earnings growth and significant increases in part-time jobs and self-employment, combined with the imminent holding of the Olympic Games.
IHS Global Insight expects the number of unemployed in the UK to rise to 2.82 million by mid-2013, lifting the unemployment rate to 8.8 percent, owing to extended soft economic activity, heightened business caution, and public-sector jobs being pared substantially.
According to the firm, though the staging of the Olympics is likely to give a boost to the job market in the very near term it may not be sustained in the longer term. Unless the economy starts showing decent improvement pressure will increase on firms to release some of the workers that they have been holding on to.
Supporting data from the Recruitment and Employment Confederation (REC) and KPMG recently showed that the number of permanent placements in the UK fell at its sharpest rate for nearly three years, while overall vacancies increased at the slowest rate in five months.
Data from the Office for National Statistics Wednesday showed that the number of unemployed decreased at a faster rate of 65,000 in the three months to June, while the number of persons in employment rose at a quicker pace of 181,000. The claimant count, meanwhile, rose by 6,100, marking the second consecutive increase, mainly reflecting changes in benefit rules for lone parents which came into effect in May.
by RTT Staff Writer
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