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Page last updated at 18:28 GMT, Thursday, 21 May 2009 19:28 UK

'One million more to lose jobs'

Retiring MPC member David Blanchflower predicts at least one million more people will lose their jobs before unemployment peaks.

Leading economist David Blanchflower has predicted that at least one million more people will lose their jobs before unemployment peaks in the UK.

Speaking to Newsnight he said 100,000 people will lose their job each month "at least until the end of the year".

He warned we face a "lost generation" of young people if the government fails to invest in the future.

Mr Blanchflower is retiring from the Monetary Policy Committee, whom he often defied by calling for rates cuts.

Mr Blanchflower on threat of a 'lost generation'

In an interview for Thursday's Newsnight programme, Mr Blanchflower described the current labour market as "pretty terrible", saying:

"We've actually had the worst month's unemployment figures we have ever seen, the largest increase in a single month, the highest percentage increase in a single month."

And he warned that the situation was only going to get worse:

"My view is we're going to see an average of one hundred thousand a month, at least for the end of the year, so unemployment is certainly going to rise by a significant amount, perhaps by another million, perhaps by more."

Graduates

He said that such dire circumstances needed to be tackled to avoid the creation of a "lost generation" of young people:

Mr Blanchflower on failure to predict the recession

"We're talking about nearly nine hundred thousand under 25 year olds now and when the class of 2009 graduates, there will be more than a million.

"This is everywhere around the country. This is not just unskilled people. Its people who are leaving the universities of Glasgow and Edinburgh and London and Exeter. It's a whole generation of people spread across the spectrum who we can't write off."

'Misread the data'

Mr Blanchflower also told Newsnight that fellow members of the MPC could have forecast the recession earlier, but misread the data.

"There are some difficulties in actually getting accurate data in a recession. Its hard to seasonally adjust things and get the right data, and get data that, if you like, forecasts thing very well, in the way that it did in benign times.

"But if you look back now and say what data did we have at the beginning of 2008, the answer is I think that we could have forecasted, we could have looked at the qualitative data.

"Its quite clear if you look now at the data that if the UK went into recession in about April or May 2008. And it was pretty clear in the data then, people just weren't reading it right," he said.

Watch David Blanchflower on Newsnight at 10.30pm on BBC Two.




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