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UK unemployment to hit 3.2 million

In a bitter blow for the UK government the British Chamber of Commerce has issued a prediction that UK unemployment will hit 3.2 million before the end of this recession. This is a significant increase from the current 2 million and indicates further difficulties over the next few years. The forecast is a lot higher than many had predicted but the fall in the UK economy has also been significantly more than expected.

Overall the UK economy is expected to shrink by 3.7% in the tax year 2008/09 which compares with a fall of 2.5% in 1992/93 recession. In 1992 recession is often quoted as being the last time the UK witnessed a serious downturn but this current ongoing recession would appear to be significantly worse. Even the Bank of England has been downbeat in its forecasts with suggestions that the UK economy will shrink by 4% at the peak of the recession something which will take a long time to make back.

Slowly but surely the forecasts for the UK economy are worsening, unemployment is expected to rise significantly and the banking sector is still very much on its knees. Many are now starting to look back to the 1930s depression and the circumstances at the time, which do have similarities with the economic environment of today.

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