UK unemployment to reach 3.2 million

A BBC reports sheds light of the unemployment trends and figures in the near future as official unemployment figures stand a 2 million but as the government has mounting debts spending cuts and tax hikes will be inevitable and as a result the peak of unemployment is likely to be much higher.

BBC forecasts reveal that this peak is likely to be at 3.2 million by the middle of 2010, with would mean close to 10 percent of the workforce unemployed during a period of further economic instability.

In the peak of the last recession on 1992-93, GDP fell by 2.5 percent however in 2008-09 it is expected to be larger fall.

The announcement is a timely development and has intensified the pressure on Alistair Darling to use the April budget to announce plans to squeeze public spending after the recession as the chancellor has borrowed heavily to fund short term tax cuts.

In last years budget report plans were laid out to borrow £500 billion over five years which has brought national debt to over a record £1 trillion, although current forecast indicate that the treasury will borrow £118 billion in the up and coming financial year and £105 billion in 2011-12.

As a result of the current government’s heavy borrowing the future government will have little choice but to increase taxation and cut spending.