Newspaper article The Evening Standard (London, England)

Darling Hopes Recession May Soon Be over - but Jobless Crisis Is Only Just Starting

Newspaper article The Evening Standard (London, England)

Darling Hopes Recession May Soon Be over - but Jobless Crisis Is Only Just Starting

Article excerpt

Byline: HUGO DUNCAN ECONOMICS ANALYSIS

T he Chancellor will tomorrow declare that the recession will be over by Christmas, largely thanks to the emergency measures the Government has taken to combat the slump.

But the upbeat Budget forecast from Alistair Darling will be of little comfort to the tens of thousands who have fallen victim to the downturn and now find themselves in the dole queue.

Unemployment has already topped two million for the first time since Labour came to power more than a decade ago and figures tomorrow morning will show the number is growing and growing quickly.

Nearly 200,000 workers are reckoned to have lost their jobs in the last three months and another million or more will do so before this downturn ends.

think Woolworths, Aviva, GKN, Bt, Royal Bank of Scotland or any other bank, and the hundreds and thousands of small firms laying off staff or going bust.

this is more than a headache for the Government -- it is a disaster -- and Darling and Gordon Brown have both promised a Budget for jobs as they battle to beef up their poll ratings.

the jobs market tends to respond to conditions in the broader economy with around a six month lag in the UK, meaning unemployment will still be rising at the time of the next general election even if growth returns at the end of this year as Downing Street hopes.

Unemployment was above 11% for much of the mid1980s before falling below 7% in early 1990. however, the Nineties recession pushed the jobless rate back above 10% and it remained there until 1994 -- long after the recession was officially over. having spent much of the middle of this decade below 5%, a return to double digit rates is now on the cards.

In fact, the unemployment rate could be as high as 11% by the middle of next year -- and almost a quarter of the jobless will have been out of work for at least 12 months.

Winning an election against such a backdrop looks increasingly unlikely. …

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