Unemployment set to rise as workforce drops again

Unemployment will increase to 2.85 million in 2012, while the workforce will fall by 120,000 as jobs continue to be lost in the public sector, a new report predicts.

The study from the Chartered Institute of Personnel and Development forecasts that the jobless total will reach its highest since 1994, peaking at 2.9 million in the first half of 2013.

The long-term unemployment total is expected to stay just under one million, thanks to Government measures targeting the two groups, the report said. It also believed that unemployment will not fall below 2.5 million before the middle of the decade due to the slow economy.

Dr John Philpott, chief economic adviser at the CIPD, said: "The combination of worsening job shortages for people without work, mounting job insecurity and a further fall in real earnings for those in work may test the resilience and resolve of the UK workforce far more than it did in the recession of 2008-9 and foster a tetchy, passive-aggressive mood in many workplaces that could prove very hard to manage."