Unemployment set to keep on rising, says forecaster

The CEBR also believes unemployment could in time rise to levels not seen since the recession of the early 1990s, hitting 10.7% by 2016, the highest for more than a decade. UK unemployment fell by 35,000 to 2.65m between last December and February.

Rob Harbron, one of the report's authors, said: "Five more years of pain are expected for much of the UK, with unemployment continuing to rise in almost every region…The outlook is tough for UK households, particularly those in places with a high dependency on public sector employment...Family budgets are being squeezed between the pressures of rising unemployment, low earnings growth and stubbornly high inflation."

The CEBR warned that areas reliant on public sector jobs and government spending will be badly hit - especially Wales, Scotland and the North East of England and the situation could be especially bad in Northern Ireland, where almost one in three people now work in the public sector.

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