Thursday, March 17, 2011

Public sector jobs disappearing more quickly than forecast

Yesterday's depressing unemployment figures from the Office for National Statistics revealed that public sector employment in the UK fell by 132,000 last year. About half were central government - about half of those 66,000 were in the education sector.

Worryingly, at the macro level, the loss of jobs in public sector is running at more than twice the rate predicted by the Office for Budget Responsibility. (The rate is even higher than the initial OBR estimates.) Clearly the OBR has been caught off-guard by the front-loading of the grant cuts to local government and the responses of councils. This may be only a timing effect but in these uncertain times it may affect confidence more generally.

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