Jobless set to top two million as the UK economy heads for

The true scale of the jobs disaster facing Britain is revealed today as experts issue dire warnings that up to half a million workers will lose their jobs over the next two years, as companies cut costs and scale back investment plans to survive the economic downturn.

Official figures are widely expected to reveal this week that the number of people out of work and claiming benefits increased for a seventh successive month in August.

Finance companies based in London's Square Mile have already laid off thousands of workers since the US mortgage crisis unleashed chaos in the world's markets last summer; and the 5,000 UK-based staff at crisis-hit investment bank Lehman Brothers are awaiting news this weekend about how many of them will be made redundant.

The constant drip of job losses is spreading beyond the City. Karen Ward, chief UK economist at HSBC, calculates that almost a quarter of the workforce - seven million - are employed in the vulnerable retail and leisure industries. Thousands of shopworkers have already lost their jobs this year, as a succession of retail companies have gone into administration. Car manufacturers are also scaling back their production after the latest registration figures showed that last month was the worst August for new car sales since 1966.

However, because the days of mass unemployment are a distant memory to much of today's workforce, many employees have built up little in the way of a financial safety net, leaving them extremely vulnerable if they do lose their job. 'Over the past 10 years, people have never had this feeling of fear,' said a spokeswoman for Citizens' Advice, which says unemployment is one of the major causes of financial distress. The spokeswoman said: 'It [unemployment] doesn't hit for a while; they often borrow more to pay for basic things, so they get themselves deeper into debt.'

See whole article : http://www.guardian.co.uk/business/2008/se...mics.redundancy

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