WIREDGOV

Dr John Philpott, Chief Economic Adviser at the Chartered Institute of Personnel and Development (CIPD) comments as follows on forecasts for UK general government employment and total UK employment for the period to 2015-16 published yesterday (29 November 2010) by the Office for Budget Responsibility (OBR):

“Although the OBR’s central forecast is for a slower economic recovery than experienced following recessions in the 1970s, 1980s and 1990s, the forecast for jobs is clearly very optimistic.

“The OBR has slashed its original forecast for public sector job cuts by 200,000 for the period to 2015-16 as a whole. And while unemployment is forecast to rise slightly in 2011 the overall outlook for jobs is positive, presaging a return to near full employment in the second half of the decade.

“The CIPD is not in a position to second guess the OBR’s latest forecast and accepts them as the best available official benchmark against which to judge labour market developments in the first half of the decade. However, the OBR’s estimates of likely public sector job losses is far lower than indicated by managers on the ground and it will be interesting to see if optimism in the public sector workforce now starts to pick up. If employment, unemployment and average earnings follow the path forecast by the OBR the ‘era of austerity’ will be felt more in workers’ pockets and living standards than in terms of lost jobs. As such the OBR forecast is most encouraging but it is still too soon to conclude that a rosy outlook for jobs is a dead cert.”