A woman enters an employment centre in Leicester, central England
A woman enters an employment centre in Leicester, central England Reuters

Up to 200,000 jobs could be cut next year due to harsh economic conditions and government cuts in the public sector, pushing U.K. unemployment to a 17-year high, warned the Chartered Institute of Personnel and Development (CIPD).

According to Britain’s Office for National Statistics, the jobless rate is currently at 7.9 per cent. That figure will climb to 9 per cent in 2011, as 80,000 private sector and 120,000 public sector jobs are shed. It is expected that fully 2.7-million Britons will be unemployed at that time.

The CIPD report intensifies worries that the private sector might not be able to generate enough jobs to fill the employment gap.

CIPD’s chief economist John Philpott told the Daily Telegraph newspaper that 2011 could be “a worse year for jobs than 2010”.

“Things only have to turn out a bit worse than expected in the wider economy for the jobs situation to weaken, which remains the CIPD’s central forecast,” Philpott noted.

CIPD believes that the government’s tough austerity program will further depress the British economy and produce real-term wage reductions.

Most workers will feel a squeeze in their real living standards, with pay rises still relatively modest against a backdrop of higher prices for many essential products and services and higher taxes,” Philpott added.

“A 'jobs-light/pay-tight' year would itself make for another challenging year for employers and HR professionals.”

Whatever jobs are created, the CIPD indicated are likely to be part-time or temporary. In addition, those with jobs can expect wage increases of only 2 percent, well below the inflation rate which stands at 3.3 percent.

“2011 will probably feel like another year in the economic doldrums, rather than the start of a return to prosperity, Philpott said.

Add in the possibility of employment disputes and social discontent arising from the fiscal squeeze and public sector job cuts, and it's not hard to conclude that 2011 could prove to be a troubled year all around.

However, Philpott discounted the possibility of the country sinking into another recession.

The jobs report will likely put pressure on Chancellor of the Exchequer George Osborne to perhaps delay imposition of the government’s austerity moves., however he and Prime Minister David Cameron have expressed their determination to cut the government’s deficit, which is expected to reach 155-billion pounds sterling this year

A spokesman for the opposition Labour Party responded to the jobs warning:The risk for 2011 is that the government will cut jobs in the public sector faster than the private sector can create new ones. With families feeling squeezed, now is not the time to be gambling with growth and people's jobs.