MPs told employment will drop faster than OBR forecast

Office for Budget Responsibility forecasts for employment levels are too optimistic compared to past recessions, MPs on the Treasury Committee have been told.

The remarks were made in a hearing on 21 November to discuss the projections and measures announced by Chancellor Jeremy Hunt in the Autumn Statement on 17 November. The OBR forecast assumes around a year lag between the first drop in UK GDP, which has just occurred in the third quarter of this year, and employment starting to fall. But Samuel Tombs, chief UK economist at Pantheon Economics, told MPs on the committee: "I think we could see a much sooner pass through into [lower] employment." He said this had been true of previous recessions: "If we look back to the 2008 recession G...