MercoPress. South Atlantic News Agency

OECD warns UK jobless could reach 9.5% by 2011

Further measures may be needed to prop jobs market

United Kingdom’s jobless rate could soar to 9.5% in two years' time, even after the economy begins to recover, a leading economic body has warned.

The Organisation for Economic Co-operation and Development (OECD) predicted unemployment would only reach its peak in 2011, from its recent 7.8% rate.

It also warned that further “substantive” measures may be needed to prevent lingering damage to the labour market caused by the rise in youth and long-term unemployment.

Joblessness has increased faster than in most other European economies because of a deeper recession and more flexible labour rules, the OECD said.

But this is still a smaller fall compared to UK output than in previous recessions, as firms have looked to reduce working hours and retain employees.

The OECD said because of this employment will continue to fall “for some time” even after the economy begins to pick up.