Warning of 9% jobless rate

UNEMPLOYMENT is expected to rise to 5.75 per cent by June 2010, but experts warn the Government has underestimated the real rate of job losses the nation could face.

In its Mid-Year Economic and Fiscal Outlook released yesterday, the Treasury says the unemployment rate will reach 5 per cent by next June, up from a previous forecast of 4.75 per cent.

However,† JPMorgan chief economist Stephen Walters yesterday said that the Treasury had underestimated the likely unemployment rate, which he predicted would more than double to 9 per cent by the end of 2010.

“We believe there will be substantially lower growth numbers and higher unemployment,” he said.

“They have forecast a budget surplus indefinitely. That’s just unrealistic. I think we are in deficit already and the current fiscal year will end in deficit.”