Think-tank NIESR has warned rising unemployment rates, which will hit 9% by the end of the year, will do permanent damage to the UK's productive capacity.
NIESR said it expected the unemployment rate to rise to 9% from its current rate of about 8.3% by the end of 2012. "Elevated unemployment for such a long period is likely to do permanent damage to the supply side of the economy, with large long-run economic costs," read the report. In addition, NIESR increased its forecast for UK inflation as a result of rising oil prices, but said it expects inflation to fall back to below the 2% target by the end of the year. In the think-tank's report on the prospects for the UK economy, it maintained its growth forecast for UK GDP at near 0% fo...
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