Unemployment will peak at 2.8 million next summer, the Chartered Institute of Personnel and Development (CIPD) has forecast.
The number of people in work will fall by 250,000 between the third quarter of 2009 and the second quarter of 2010, with unemployment rising to an all-time high next summer, the HR body has predicted.
The forecast is lower than financial experts, employers’ groups and the government expected at the start of this year. However, John Philpott, chief economic adviser at the CIPD, warned a slower than expected recovery or stronger earnings growth would threaten to raise peak unemployment to at least three million.
A Conservative government, which plans to make more immediate cuts in public spending should it come to power next year, could also influence unemployment figures, Philpott said.
He added employers would also be forced to continue to squeeze pay next year. “This could be difficult to deliver following a recession during which many private sector employees have experienced pay freezes or pay cuts,” he said.
He added: “Private sector employers will seek to contain wage costs and public sector employers will have to cope with the consequences of fast-shrinking budgets and mass job downsizing.”
Last week the Office for National Statistics revealed unemployment had risen to nearly 2.5 million in the three months to October.