It is good news that the labour market is inching in the right direction and that youth unemployment is falling. However, latest forecasts from the Office for Budget Responsibility suggest that unemployment will peak at 8.2% which may mean further job losses in the medium term.
Small firms are key to hiring the economically inactive - an area in which unemployment rose by 60,000. Small firms that want to expand and take on more staff need an extra incentive. Extending the national insurance contributions holiday to all micro firms across the whole of the UK would be a good starting point. This would help to create an additional 45,000 jobs while adding £1.3 billion to GDP.
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