Unemployment to hit 2.9m by 2011

There could be as many as 2.9m unemployed in the UK by 2011, the CBI has warned. The business group said today that it believes the recession will be more severe, and last for longer, than previously thought.

The economy is now forecast to shrink by 1.7 per cent in 2009, dramatically less than the 0.3 per cent growth the CBI was predicting for the same period in September this year.

Yesterday, the Royal Bank of Scotland (RBS) announced it is to slash 3,000 jobs in its global banking and markets departments as it awaits a £20bn payout from the UK Government.