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Osborne's next headache: rising unemployment

Unemployment is set to rise to 2.7m in 2013.

Unemployment is expected to peak at 2.7m in 2013. Photograph: Getty Images.

As the economy has sunk deeper into recession, the Conservatives have pointed to falling unemployment as proof that their strategy isn't failing on every count. But what few have noticed is that almost every forecaster expects joblessness to rise over the next year.

Today, the British Chambers of Commerce said that it expected unemployment to increase from 2.56 million (8%) in Q2 2012 to 2.75 million in Q4 2013, a net increase of 186,000. It cited the planned spending cuts (most of which have yet to be implemented), the lack of growth, and rising productivity as reasons why the jobless total will rise. Similarly, the CBI said that it expected unemployment to rise to 2.7 million next year, despite the likely return of the economy to growth (the reverse of the trend that has so confounded economists).

Both the BCC and the CBI expect unemployment to start falling after 2013 but a year of rising joblessness will make it even harder for George Osborne to tell anything resembling a good story.