The number of people working part-time in Britain – and struggling to find full-time jobs – is continuing to rise. Office of National Statistics figures put the number of part-time workers at 7.84 million following a recent increase of 115,000. This puts into context the fact that the number of people in employment jumped by 184,000 to 29 million. The ONS said 68,000 people did find full-time jobs in the period up to June.
The number of people out of work for more than a year was up 33,000 to a 13-year high of 796,000 over the same period. The figures have been spun as the largest rise in employment since 1989 and a fall in the number of jobless by 49,000.
The figures were published as Ken Clarke’s Ministry of Justice led the first wave of an anticipated 600,000 public sector job cuts by promising to shed at least 15,000 employees while ministers change the law to lessen redundancy and pension obligations. At the same time, the coalition has reportedly written to former ministers in the last Government to ask them to forego their severance payments.
The coalition is banking on the private sector to create new jobs but a report by the Chartered Institute of Personnel and Development, which surveyed 600 employers, found a third expected to cut jobs in the next three months.
Against this projected backdrop of even more job losses, average earnings continue to lag well behind inflation. A typical pay packet rose just 1.3 per cent in the three months to June, compared to 2.7 per cent for the previous quarter, as the Bank of England admitted it had underestimated inflation forecasts yet again and would have to readjust its projections. Bank of England Governor Mervyn King was forced to admit that the British economy faces a “choppy recovery” over the next two years.
He said the Bank was lowering its economic growth forecast to 2.5 per cent next year, down from 3.4 per cent, and inflation would stay higher for longer than previously forecast aided by the forthcoming increase in VAT to 20 per cent and other tax rises.
The Government’s preferred inflation statistic, the Consumer Price Index, which excludes many real world living costs, is 3.2 per cent, well ahead of the Bank of England’s target of 2 per cent. The Retail Price Index, which does include housing costs, is even higher at 5 per cent. Mr King also admitted that a lack of bank lending is limiting economic growth.
“It will take many years before bank balance sheets and fiscal positions return to anything like normal”, he said. He hoped the fall in the value of the pound would at least benefit exports.
His remarks, and the publication of the latest statistics and forecasts, came as the United States acknowledged the increased risk of a double-dip recession after jobless figures were double what was expected.
