MercoPress. South Atlantic News Agency

UK unemployment forecasted to soar to 3.4 million

The United Kingdom unemployment will soar to 3.4 million as the financial crisis deepens, experts predicted ahead of official figures set to show the scale of the jobs crisis rocking the economy.

The number of jobless Britons will soon top two million after a spate of redundancies in recent months across industry, hitting sectors including finance, retail, transport and the media. The official unemployment total reached a 10-year high of 1.86 million last October and some analysts expect the figure to increase to two million when new figures are published on Wednesday. An independent forecasting group has predicted the figure will pass 3.25 million by the end of 2010, hitting 3.4 million the following year. The fear of being out of work will drive consumers' behaviour for the first time in a generation, said the Ernst & Young ITEM Club. It warned the next 12 months will see the UK economy suffer its largest contraction since 1946, when it faced the aftermath of the Second World War. ITEM - Independent Treasury Economic Model - the government financial model it uses for predictions, - said the UK's gross domestic product would shrink by 2.7% in 2009 and another 0.5% the following year. "Without additional Government intervention a deep recession could evolve into a depression," the group said. Peter Spencer, its chief economic adviser and an economics professor at the University of York, said: "It is easy to criticise and conclude that none of the Government's policies are working. "However, we must not lose sight of the fact that they have prevented the collapse of the monetary system as we know it. But more needs to be done urgently otherwise the flow of credit will remain frozen and the economy will remain in recession".