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More than 5000 job losses were announced yesterday by some of the UK's leading companies, ahead of new official figures that are expected to show the highest number of people out of work since 1998, well on track to exceed two million by Christmas.
Some London City economists predict that unemployment will top three million by 2010; Capital Economics says that the British economy will shed 1.5 million jobs before the recession is over.
The jobs news and the increasingly grim forecasts will intensify pressure on the Government to announce a substantial package of tax cuts and public spending increases when the Chancellor delivers his pre-Budget report, expected within the next week or two.
Tory leader David Cameron this week set out his £2.6 billion ($6.95 billion) scheme to offer a national insurance break of £2500 ($6690) to companies that take on workers who have been unemployed for more than three months. The Bank of England will publish its latest growth forecasts in its quarterly inflation report, which is widely expected to confirm that the UK is heading for a more serious recession than previously assumed.
The FTSE 100 index of leading shares fell by 3.6 per cent on heightened fears of a deep recession.
The decline of the workforce is moving beyond the financial and construction sectors, whose difficulties have been well publicised, into more high-tech parts of the economy.
The largest loss of jobs will be at the cable group Virgin Media, which said it was axing about 2200 British jobs by 2012. Yell, which publishes the Yellow Pages, has scheduled about 1300 job losses over the coming year.
GlaxoSmithKline, the UK's biggest drugs group, unveiled plans to close its factory at Dartford, with some 620 jobs to go by 2013, even though the pharmaceutical sector is usually one of the most robust during a recession.
Almost every corner of the British economy is now feeling the effects of the collapse in consumer confidence and the restriction of bank finance. Manufacturing has been in recession since the middle of the year and the British motor industry has been hit especially hard. Short-time working has been announced at almost all of the major companies - Nissan, Honda, Land Rover and Ford being the most prominent.
Last month saw the steepest rise in unemployment for 17 years, with the workless total soaring by 164,000 in the three months to August, leaving unemployment at 1.79 million, or 5.7 per cent.
- INDEPENDENT
