Jobs to decline this year despite economic growth

EMPLOYMENT will fall by 100,000 in 2011-12, despite the recovery continuing with 1.8 per cent economic growth, official forecasts claimed yesterday.

Along with downwardly revised growth expectations for this year, the government’s fiscal watchdog painted a gloomier picture for the jobs market.

The number of people claiming unemployment benefit will rise to 1.55m in 2011-12, from 1.48m in the current fiscal year, the Office for Budget Responsibility predicts.

However, employment is still expected to rebound in the medium term, with an extra half a million jobs created by 2013-14, and an extra million by 2015-16.

“Over the next five years we expect market sector employment to rise by 1.3m, partly offset by a roughly 400,000 fall in general government employment,” it said in a statement published after the budget.

Unemployment will rise from eight to 8.3 per cent of the labour force by the second quarter of this year, the OBR expects, yet it remains confident of it falling to 6.4 per cent by 2015.