YOUTH UNEMPLOYMENT in the UK stands at a record high, it emerged yesterday, as the governor of the Bank of England, Mervyn King, offered a gloomy prediction for the year ahead.
He cautioned that growth predictions made just months ago have been cut, and warned that inflation could exceed 5 per cent by the end of year.
However, Mr King, who is coming under increasing pressure to increase interest rates to dampen down inflation, warned markets not to expect any imminent decision to increase the existing historic low rate of 0.5 per cent, saying “it may be many quarters until we do anything”.
Defending the Bank of England’s record on inflation, which currently stands at over 4 per cent as measured by the consumer price index, Mr King said it had been affected by higher international costs for commodities and food, while the increase in VAT to 20 per cent last month had further fuelled price increases.
Mr King’s declarations came as official figures showed that the number of unemployed people aged between 16 and 24 reached 965,000 in the three months to December – up by 66,000 on the previous three months and the worst ever result since comparable records began in 1992.
The figures are particularly worrying because 75,000 of these have not had a job for over two years, up 43 per cent on a year ago, with much of the increase concentrated in areas such as south Wales, northern England and parts of Scotland, which are already economically depressed.
Rejecting Labour leader Ed Miliband’s criticism of the government’s efforts to deal with the crisis, British prime minister David Cameron said it has embarked on the biggest “back-to-work” effort since the 1930s.
Meanwhile, the Chartered Institute of Personnel and Development said job losses would accelerate in coming months as public sector organisations began to lay off staff to cope with Whitehall spending cutbacks, while a third of private sector companies were planning to do the same – damaging hopes of a private sector-led recovery.
