UK Economy Could Lose 600,000 Jobs in '09: Report

As many as 600,000 people could lose their jobs in Britain next year, making 2009 the worst year for unemployment since 1991, personnel experts warned on Monday.

The Chartered Institute of Personnel and Development (CIPD) said a widely-expected recession would bite hard in Britain next year and could push unemployment close to the three million mark before the economy begins to recover.

"By the end of 2009 the number of people unemployed and actively seeking work will have increased to 2.8 million, one million above the autumn 2008 figure," John Philpott, the CIPD's chief economist, said in its annual Barometer Report.

The first few months of the year, he said, were likely to be the worst for almost two decades.

"Our current expectation, based on available survey evidence and employer soundings, is that the number of redundancies will jump sharply in the early months of 2009, once employers take stock of the economic outlook. The period between New Year and Easter is likely to be the worst for redundancies since 1991."

The CIPD's warning came as another British retailer -- children's clothing shop Adams -- fell into administration.

The demise of Adams, which employs about 2,000 staff, follows that of other nationwide retailers including the chain store Woolworths, the music chain Zavvi, tea and coffee outlet Whittard, and menswear group The Officer's Club.

Woolworths collapsed into administration in November and its administrators said all its stores would close by Jan. 5, with the loss of 27,000 jobs, unless a last-minute buyer were found.

The CIPD also conducted a survey of 2,600 workers and found that those employees who keep their jobs expect to have their pay frozen or even cut in 2009.

Some 28 percent do not expect a pay rise in 2009, while 26 percent think their pay rise will be lower than in 2008.

Only 11 percent are expecting a higher wage increase than last year and two percent expect a pay cut.

"With job cuts seemingly lurking around every corner and trading conditions tight, employees are realistic about their pay prospects for the year ahead," said CIPD reward adviser Charles Cotton.

"Against this backdrop, employers will need to work hard to find new ways to motivate their employees to perform. Targeting pay increases to reward superior performance, making intelligent use of non-financial rewards, and targeted investment in training and development are all ways of making limited budgets go further." 

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