Bank policy man warns on jobless

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Unemployment in the UK will rise dramatically warns David Blanchflower, the Bank of England official who predicted the recession.

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Bank policy man warns on jobless


Mr Blanchflower chose not to renew his term at the Bank.

The UK is set for big increases in unemployment warns David Blanchflower, the Bank of England official who correctly predicted the recession.
Mr Blanchflower told the BBC that the number of jobless is going to rise by hundreds of thousands a month, more than double recent monthly rises.
He also predicted that unemployment will hit "well over three million", up from about 2.2 million currently.
He added unemployment among the young would become a "national tragedy".
'Tough times'
"People, I think, are going to be shocked for several months to come about the scale of the increases in unemployment that are in train, and there's nothing much really we can do about it," Mr Blanchflower warned.
My worry is that we're going to see a million young people under the age of 25 unemployed by September


David Blanchflower

"My view is that [whereas] we've seen increases in unemployment of about 40,000 month, now we're going to see numbers in the hundred thousands a month.
"Unemployment is going to go up, well over three million and it's going to interact in places with negative housing equity - these are really tough times ahead," he said.
He said the Bank of England and the government had taken steps in the right direction, by lowering interest rates and stimulating the economy by spending more.
But he said the difficulty lay in "the sheer intensity and severity of this shock [that] we've not seen before."
'Huge increase'
He argued the problem was not so much due to people being laid off, but due to the fact that firms simply are not hiring any staff. This, he explained, is why the young are being particularly badly affected.
"Unemployment is going to rise a lot, and it's going to hit the young [hardest]. My worry is that we're going to see a million young people under the age of 25 unemployed by September. It's a national tragedy and it's the number one issue we're going to face for the next year."
He said one "sensible response" would be to "hugely increase the number of places in colleges and universities. Better to have people in education than to have them on the street."
Mr Blanchflower was - until recently - a member of the Bank of England's Monetary Policy Committee, which sets interest rates in the UK. He made a CBE in the Birthday Honours last week.
He consistently called for a reduction in rates to stimulate the economy in the run up the recession.