Unemployment in the U.K. will likely rise further later this year and in 2013 due mainly to prolonged weakness in the economy and subdued business confidence, IHS Global Insight Chief UK and European Economist Howard Archer said Wednesday.
Unemployment is headed higher later this year and will rise further in 2013 as a consequence of extended soft economic activity, heightened business caution, and public-sector jobs being pared substantially, the economist added.
He pointed out that if the economy fails to show a sustained decent underlying improvement, pressure will increase on firms to release some of the workers that they have been holding on to.
Archer expects the number of unemployed on the ILO measure to reach a peak of 2.80 million in 2013 and the unemployment rate to reach 8.7 percent.
However, the ongoing restrained earnings growth as well as significant increases in part-time jobs and self-employment are helping to keep unemployment down. The holding of the Olympic Games appeared to provide at least a temporary boost to employment as reflected in the latest official figures, Archer said.
According to data released by the Office for National Statistics on Wednesday, the number of unemployed based on ILO measurements declined by 46,000 sequentially to 2.56 million in the June quarter. The unemployment rate fell to 8 percent during the period.
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