In the UK, unemployment is set to peak at 7.5%, with 2.6 million people out of work, in the second quarter of next year, before falling to 4.4% by the end of 2024, according to the OBR.
The government will spend a further £55bn next year to support public services and make an extra £3bn available to help people find jobs. The chancellor explained a public-sector pay freeze for next year (excluding NHS staff and those earning less than £24,000) by pointing out that private sector pay had fallen by 1% in the SIX months to September compared to last year. Public-sector wages, by contrast, had risen by nearly 4%.
The national living wage is also set to rise by 2.2% to £8.91 an hour in 2021 for employees aged 23 and over. Sunak promised more money to the devolved governments in Scotland, Wales and Northern Ireland and said UK government department spending would rise by 3.8%, “the fastest growth rate in 15 years”, to £540bn next year.
The chancellor also announced the creation of a new infrastructure bank to finance projects from next spring and a new £4bn levelling-up fund. Overseas aid will be cut to 0.5% of national income and restored to the current 0.7% “when the fiscal situation allows“.
The chancellor was right to say… “now is not the time to tighten fiscal policy“, according to Ruth Gregory of Capital Economics. “The biggest danger is that the government withdraws its support too fast and too soon.”
Kris Paterson is a writer for www.whatjobs.com the global job search engine