UK unemployment in 2009 will be worst in Europe
UK unemployment is expected to rise by 1.5 per cent in 2009, half a percentage point more than the predicted EU average, according to the European Commission’s latest economic forecast.
The report says that employment will decline as a result of falling output, dropping by 1.1 per cent. Supply of labour is also projected to slow down, reflecting reduced immigration. Across the EU, economic growth is expected to drop from 1.4 per cent in 2008 to 0.2 per cent. It is expected to rise again in 2010 to 1.2 per cent.
“The economic horizon has significantly darkened as the EU economy is hit by the financial crisis,” said Joaquín Almunia, economic and monetary affairs commissioner. “Emerging economies are holding up better than the EU and the US so far, but even they are unlikely to escape unscathed. We need coordinated action at EU level to support the economy similar to what we have done for the financial sector.
"The commission last week set out a framework for recovery that aims to boost investment, sustain employment and demand. We are looking forward to hearing member states’ views and, especially, to a joint approach at the EU level.”
One silver lining: inflation is expected to have peaked and will fall rapidly below 2.5 per cent in 2009 and 2.25 per cent in 2010 in the EU.