Experts warn trouble ahead despite Olympics jobs boost

Economists warn the jobs boost provided by the recent Olympics is unlikely to last as the economy continues to shrink.

The total number of people out of work fell by 46,000 in the quarter to June this year to 2.56 million, putting the unemployment rate at 8 per cent, the lowest level for a year.

The recent Olympic Games was attributed largely to the recent boost since much of the quarterly fall occurred in the London area.

Jim Hillage, director of research at the Institute for Employment Studies claimed the recent “Olympic Halo” effect had impacted positvely on the jobs market, especially in the retail, transport and hospitality sectors.

But he added he was “unsure” whether the boost would last adding;

‘While this is undoubtedly good news, the latest labour markets statistics do raise questions about why they seem so out of kilter with other recent economic data.

‘It is therefore not clear whether these data herald better economic news to come and whether the Olympics can offer a lasting economic legacy.’

Howard Archer, chief economist at HIS Global Insight claimed the economy was in for one of three possible outcomes adding;

‘The implication is that either the economy is doing appreciably better than the national accounts data show, the labour market is doing significantly worse than the hard data show, or productivity has genuinely weakened sharply.”