Analysts fear jobless figures will rise again by the autumn

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The Independent Online

An autumn hangover for the UK's jobs market is set to swell the unemployed ranks by 150,000 by the end of this year, experts warned today.

Official figures have so far defied an apparently worsening double-dip recession as unemployment fell 65,000 to 2.58 million in the quarter to May, prompting many economists to cast doubt over the growth data.

A big fall in the capital's jobless count – in part attributed to Olympic hiring – helped drive the improvement, but the recovery could soon run out of steam. Economists forecast the rate will rise from 8.1 per cent to 8.6 per cent by the end of the year – equivalent to around 150,000 more out of work.

The rate is expected to remain stable at 8.1 per cent in the quarter to June when the latest figures are released on Wednesday. But Vicky Redwood, the chief UK economist at Capital Economics, said: "We may get a dip in the jobs market following the Olympics, while the impact of recession should soon be felt on the unemployment figures."

The Office for Budget Responsibility predicts even worse pain with the jobless rate hitting 8.7 per cent by the end of 2012, but recent signals have been mixed. The Recruitment and Employment Confederation has warned that the numbers placed in permanent jobs fell for the second month in July, but the Chartered Institute for Purchasing & Supply showed manufacturers, builders and services firms taking on staff at a faster rate last month.

Chris Williamson, the chief economist at survey compiler Markit, expects another fall in unemployment this week but added: "Unless the economic climate improves this will be the last nudge down we see in the figures for a while."