Jobless to keep on rising—report

Press, 2 June 1981, Page 9

Jobless to keep on rising—report

NZPA London There are no signs of an economic recovery in Britain before the end of 1982, a major independent forecasting group said yesterday. “Ministers have been asserting in recent speeches that economic recovery is now beginning. Our forecast does not support this,” said the National Institute of Economic and Social Research, in its latest quarterly economic report. “The general prospect, on our forecast, is for output to stay more or less flat as far ahead as we can see and that, of course, implies that unemployment will go on rising, though not as fast as it did during 1980.” The institute, whose support for Keynesian economics has led it in the past to be labelled the “treasury in exile,” once again called in the report for reflationary

measures from the Government. Although this would not solve the problem of the poor competitive performance of British industry.it would at least “make a very bad prospect slightly less bad.” “Experience over the last two years has reinforced the conclusion that the attempt to get rid of inflation simply by deflating the economy leads to unacceptably high figures for unemployment at still high rates of inflation. So the search for alternative methods, and that means essentially a search for workable reforms of- the wage bargaining system, will have to be renewed sooner or later. There is no other way.” The institute said that last year manufacturing output fell by 16 per cent, “a greater fall than that which occurred in the Great Depression between 1929 and 1931.”