UNEMPLOYMENT WILL RISE to 14% by the end of this year, according to the latest economic forecast by Ulster Bank.

Although the overall outlook shows positive signs for an export-led recovery in the Irish economy, Ulster Bank predicts that unemployment will rise slightly during 2010. That figure is expected to peak at 14% at the end of the year, and then begin to reduce in 2011.

The report stated:

On the jobs front, the labour market is set weaken further in the short term: employment probably has further to fall, though at a reduced pace compared with heretofore, while the unemployment rate is set to peak between 13.5 and 14% later this year, from 12.9% in Q1.

The report outlines that as the nature of the recovery in Ireland’s economy will be led by exports, this will probably not have a significant impact on employment as “export growth is not labour-intensive”.

Ulster Bank states that the cost of recapitalising Anglo Irish Bank is weighing “very heavily” on investor sentiment, and that several more years of fiscal tightening will be required because of the scale of the national deficit.

The banks stressed that “it is extremely important for the Irish authorities to provide clarity as soon as possible around the future plans for Anglo, and the ultimate total cost thereof to the exchequer”.