Spending cuts could push UK unemployment over 3 million
A report by the Chartered Institute of Personnel and Development has forecast that UK unemployment could top 3 million if David Cameron and his coalition partners go ahead with the massive cost-cutting exercise suggested earlier this week. The Institute also believes that real growth in wages will not appear until 2015 and indeed many in the public sector will be facing wage cuts in the short to medium term. This would all point to a subdued economic environment in the UK, although there is no doubt that the budget deficit needs to be addressed.
No matter what the politicians or the experts say, there is no doubt that UK business and UK consumers are going to feel the pain before we return to anything like a growth path. There is no way around the massive budget cuts needed in the UK and David Cameron is well aware of this. If he was to allow the budget to remain at current levels this would increase the chance of economic prosperity in the short-term but would store up pain for the future and would put the UK's AAA rating at risk.
David Cameron is very much in a no-win situation at the moment.
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