MercoPress. South Atlantic News Agency

UK recession “predictor” warns of 3 m unemployment

Professor David Blanchflower

The economist whose recession warnings and calls for interest rate cuts were snubbed by Bank of England colleagues warned in an interview he feared UK unemployment could hit three million in a year's time.

David "Danny" Blanchflower, who has been a member of the Bank's monetary policy committee (MPC) since June 2006, added that interest rates will "obviously" reach the near-zero levels already seen in the United States. Mr Blanchflower, a US-based labour market expert, told the Sunday Times that he was particularly concerned about the rise in unemployment among young people. He said: "When unemployment rises, it rises more among the young. The most worrying number in the latest statistics was that of the 131,000 rise in unemployment, 55,000 is among 18-24 year olds. "Then there's the worry about the Class of 2009 and the people who will be entering the labour market in June. This is a big problem. Unemployment when people are young really matters. There are 600,000 18-24s unemployed now, 14.5% already. That's my concern." The jobless total increased in the three months to November to 1.92 million, the highest figure for more than a decade. Mr Blanchflower added: "It would be hard to think we would not get to three million, perhaps in a year's time. If you take the experience of previous recessions, three million might be optimistic." The economist's calls during the past year for drastic interest cuts to stave off recession were ignored until recently because of inflation concerns. He said in the interview that MPC members had "got behind the curve". Mr Blanchflower added: "If you look back to what I was saying in January 2008, a year ago, it was that we needed to cut interest rates to avoid a recession.