Unemployment in the UK will continue to rise, Alistair Darling warned yesterday. In a break from normal procedures, where chancellors resist the temptation to predict future jobless figures, the Mr Darling told MPs that “unfortunately it will continue to rise for a while“. The announcement has caused concern amongst IVA and Debt Management providers that are already struggling to deal with the high level of UK debt problems.
Most commentators agree with the Chancellors remarks; however the most recent evidence shows the pace of growth in jobless numbers is slowing noticeably. Generally, the UK has been doing a good job keeping unemployment down. According to one reading of the official statistics, the number of people out of work has been falling over the last couple of months, and now stands at just below 2.5m. This represents around 8% of the total workforce.
When you take into account the 6% fall in GDP seen since the spring of last year it could be seen as a positive when you consider how modest the rise in UK unemployment has been. The Governor of the Bank of England and the Director General of the CBI have both recently pointed out that things are not all doom and gloom. Other countries have seen much higher unemployment, including the United States. Mr Darling’s remarks coincided with the news concerning the Dubai crisis.
There has been a sharp increase in the number of UK consumers that are struggling to repay their debts since the start of the current recession. Debt Management and IVA providers have had to deal with more people with unaffordable debts as unemployment continues to increase.
Ivan Cooper, Chairman at Chiltern Debt Management said: “We are monitoring the jobless situation closely and, wherever possible, we are putting in place the necessary provisions to deal with increasing numbers of over indebted consumers.
“We welcome the news from the Chancellor concerning the decline in the rate of increase in jobless numbers, as we all hope to see an end to the current financial crisis soon.”