Unemployment is unlikely to top three million next year as many experts had predicted, the Bank of England chief economist has said.
Spencer Dale said today that the jobs market had turned out to be stronger than expected given the scale of the recession.
Despite the UK suffering the longest recession since Second World War, with the economy likely to shrink by 4.75% this year, Dale said the steps firms have taken to save jobs, such as implementing pay freezes or cuts, could have helped to keep unemployment down.
In the foreword to the central bank’s Quarterly Bulletin, reported by Reuters, Dale said: “A marked feature of the response of our economy to the current recession is that employment to date has not fallen by as much as we might have feared given the falls in output.”
He added: “A substantial element of the workforce appears to have been able to protect their jobs by accepting slower wage growth.”