Unemployment expect to fall as part-time jobs filled

Experts are predicting statistics will show unemployment fell by 65,000 in the three months to June, to 2.45 million, after another rise in employment levels.

However, a recent surge in employment was almost entirely attributed to soaring numbers of people taking part-time work because they could not find a full-time job.

The fall in headline unemployment is also likely to be only a brief respite before the Government's spending cuts take effect, according to research.

A survey of 600 employers earlier this week found that a third expected to cut jobs in the next three months - the worst figure for a year and up from one in four at the end of 2009.

The study by the Chartered Institute of Personnel and Development predicted that unemployment overall would rise as public sector job losses would offset a rise in private sector jobs.

The Treasury itself estimated that there will be 600,000 public sector job cuts over the next five years.

Howard Archer, chief economist at IHS Global Insight, said: "Unemployment could well continue to fall in the near term, but we suspect that it will start to head back up later this year and then increase further in 2011 and early 2012."

He believes the private sector will also become cautious in its employment plans amid concerns the fiscal squeeze will hold back growth in the wider economy.

"Many firms are likely to try and meet any increase in business through making greater use of the workers they have already and they are likely to be reluctant to take on any more staff," he added.

Today's figures will also give an update on the number of long-term unemployed amid warnings over older workers trapped in a jobless cycle.

Last month's data showed the number of people out of work for more than a year reached a 13-year high of 787,000 after a 61,000 rise in the three months to May.

Age UK said around two in five unemployed workers aged over 50 - 170,000 people - have been out of work for over a year.

Michelle Mitchell, charity director at Age UK, said: "This is the highest level of long-term unemployment among over 50s that we have seen in a decade and brings back the spectre of the last two recessions, which left a devastating legacy of unemployment among people in later life."

Last month's figures from the Office for National Statistics (ONS) showed the part-time workforce reached a record 7.82 million in the three months to May.

The ONS said 27 per cent of the total workforce was in part-time employment.

The news overshadowed a 34,000 fall in unemployment to 2.47 million in the three months to May and a fifth successive fall in the claimant count, which was down by 20,800 to 1.46 million in June.