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Unemployment is likely to rise above 3 million in the current recession, the Bank of England's labour market expert, David Blanchflower, warns today.
His comments come the morning after the US Federal Reserve slashed interest rates to 0.25%, their lowest ever, in a bid to lift the world's largest economy out of deepening recession.
In the UK, official figures are likely to show that the broadest Labour Force Survey measure of joblessness approached the 2 million mark in the three months to October.
Blanchflower, an external member of the Bank's monetary policy committee, has already warned that the jobless total will top 2 million - 6% of the workforce - by Christmas, although the figures will not be out until February.
Today's figures are also likely to show that the narrower claimant count measure of unemployment has risen above one million for the first time this decade.
"I expect unemployment to continue to rise through 2009 and into 2010, probably to over three million," the British-born US academic says in an article for the Royal Economic Society's January newsletter, a copy of which was obtained by the Guardian. "And I believe the impact of constrained credit conditions has yet to fully feed through to the broader economy, particularly to investment by firms."
Blanchflower has taken the lead on the monetary policy committee this year in calling for lower interest rates. After initial reluctance to cut as inflation rose, the committee in the last two months slashed rates to a 57-year low of 2% from 5%.
The committee is expected to cut them to an all-time low of 1% in the next two months, especially as inflation is slowing rapidly and threatening to turn into deflation.
In the US, the Fed has reduced its key policy rate from 5.25% to barely above zero in little more than a year.
Blanchflower asks today: "Where is the light at the end of the tunnel? I can't see any." He adds that, taking the definition of a recession used by the US national bureau of economic research, the recession in Britain began in April this year - earlier than most experts think.
Blanchflower's view is echoed by the TUC, which warns today that half a million people are likely to spend their second Christmas in a row out of work because of a rise in long-term unemployment.
It also says that the rate of long-term unemployment - those out of work for at least 12 months - is rising even faster than general unemployment.
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