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Unemployment to rise in 2012: report

New forecast points to highest jobless total since 1994.

Unemployment is expected to rise to 2.85m in 2012 and peak at 2.9m in 2013, a leading business group has predicted.

A report released today by the Chartered Institute of Personnel and Development (CIPD) indicated that unemployment will reach its highest rate since 1994, while youth unemployment and long-term unemployment will stay just under 1 million.

The number of people in work will fall by 120,000 as public sector job losses outstrip private sector growth, the report indicated.

Dr John Philpott, chief economic adviser at the CIPD, warned of a jobs recession "milder than that suffered in 2008-9", subject to the outcome of the eurozone crisis.

He added: "The flipside of a mild jobs recession in 2012 is a mild jobs recovery in subsequent years and a correspondingly longer wait until unemployment starts to fall."

Employment is currently at 2.64m, according to the latest official unemployment figures.