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Unemployment set to rise for at least another 12 months

As we await official unemployment figures from the UK government it appears that the rate of unemployment is set to rise from 7.1% to 7.3% with an increase of 63,000 in May alone. This is a 12 year high which dates back to February 1997 and will see a total of 2.27 million people unemployed in the UK. However, both the CBI and the TUC believe this figure is nowhere near the top with forecasts of between 3 million and 3.25 million still being bandied about.

One thing is sure, even though the UK economy is showing signs of improvement there is still significant unemployment distress coming to many areas of the UK in the short to medium term. As we have mentioned on numerous occasions, the unemployment figure always lags a recovery in the UK economy with businesses unwilling or unable to invest into their operations until they see definitive improvement in business levels. This prolonged period of rising unemployment will also place more and more pressure upon the social security budget and reduce the government's income tax take into the future.

The early signs of confidence and euphoria which will greet the eventual improvement in the UK economy may well be short lived as the reality of continued unemployment hits more and more people.

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