The Lost Half Decade: Unemployment expected to be 770,000 higher in 2013
As regular readers will be aware I am quite a fan of the monthly round up of independent economic forecasts published by the Treasury.
The August edition was published two weeks ago and contained the tri-annual additional set of ‘medium term forecasts’ out to 2015. These make for depressing reading.
The table below shows the average growth forecast for each year out to 2015 both as they currently stand and how they were just six months ago in February.
Not only has 2011 been downgraded (in a very substantial manner) but so has growth in each of the subsequent years.
To make these numbers more ‘real’ I’ve also included the medium term forecasts for claimant count unemployment in each year, as they are today and how they were six months ago. The orange bar is the difference between the forecasts.
The effect of the downward revisions to 2011, 2012, 2013, 2014 and 2015 is to move the peak of unemployment back a year from 2012 to 2013.
Unemployment in 2013 is now expected to be 770,000 higher than it was just six months ago.
I’m rather surprised this hasn’t generated more headlines.
UPDATE: 5th September – It seems that since I wrote this post the Treasury have re-issued their August forecast document.
It looks like their summary data included an error (including an ILO rather than claimant count figure) and rather then unemployment being 770,000 higher in 2013 it will be a ‘mere’ 130,000 higher.