AS 2014: OBR revises down unemployment forecast

The Office for Budget Responsibility has revised down its forecast for unemployment for next year to 5.4 per cent and says it will then settle at 5.3 per cent.

This is down from its Budget prediction of 6.8 per cent for 2015 and 5.4 per cent for 2018.

The number of unemployed people gaining employment in the UK has doubled compared to Office for Budget Responsibility estimates in the Budget.

In his Autumn Statement today, Chancellor George Osborne said the number of people gaining work over the last 12 months stood at 500,000, up from the 265,000 estimate of the OBR in March.

The Chancellor added that in the first three quarters of the year the number of people claiming unemployment benefit had fallen by 23 per cent, a significant increase on the 7 per cent OBR prediction in the Budget.

He says: ”Growth is now more balanced and manufacturing is growing faster than any other sector and investment is said to be up 11 per cent, growing faster in the UK than any other major economy.”

He added that 85 per cent of the new jobs created were full time with the fastest growing number of jobs created in Scotland and Northern England.

The Chancellor said those in full time employment saw regular earnings growth of 4 per cent this year.

The OBR now predicts meaningful wage growth will be above inflation for the next five years.