Within 5 years, unemployment levels will reach 10% in over half the regions in the UK predicts the CEBR.
The biggest drop in economic output will be in the North West, but other areas such as the North East, Yorkshire, Wales and the West Midlands will also fare badly.
A director for a Manchester based IT recruitment firm noted that there has been an upturn over the last 6 months but uncertainty remains as to the effect of the public sector spending cuts.
Paul Clutton, a director at Professional Recruitment Wales has an even more pessimistic view of the future saying he believes that Welsh unemployment will exceed 10% as the public sector accounts for between 60 to 70% of all recruitment activity.
On a slightly better note, the UK saw a 1.2% increase in GDP over the last quarter. The ONS originally reported a figure of 1.1% in July but this has since been revised. The increase is the fastest quarterly rise recorded for over nine years. The manufacturing and production sectors recorded stability in the last quarter with production output rising by 1% for the second consecutive three months and manufacturing rising by 1.4% in Q1 and 1.6% in Q2.
The September Economic Forecast from the BCC now predicts GDP growth of 1.7% for this year and 2.2% in 2011. However, the Chamber still expects unemployment to increase, peaking at 2.65 million in 2012.
On a more positive note, at least as far as the economy is concerned, the BCC expects the fiscal deficit to reduce faster than originally planned but with a sharp slowdown in growth as the VAT increase is implemented. The business group expects GDP to average less than 2% per annum for the next four to five years.
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