Job cut forecast rises by 100,000

Another 100,000 public sector job cuts are expected to be predicted by the independent tax and spending watchdog, said a key forecasting group.

The Office for Budget Responsibility (OBR) will up its March forecast of 400,000 job losses to 500,000 when it delivers its Economic and Fiscal Outlook report on Tuesday, the Ernst & Young Item Club said.

The OBR's original forecast, used by the Treasury in determining fiscal policy, predicted that only 20,000 general government jobs would be lost in 2011/12, Ernst & Young said, but just one quarter into the new financial year, the number of already stands at 147,000.