UK austerity measures to hit private sector jobs: PwC study

According to a report by accounting firm PricewaterhouseCoopers, the UK's fiscal austerity measures could hit the private sector, with companies that do business with the government cutting jobs and output.

In the private sector almost half a million jobs could go along with £46 billion in annual gross output by 2014-15, as government efforts to rein in a record budget deficit sends ripples across the supply chain, the report says.

The hardest hit region could be Northern Ireland and jobs in business services and construction would be hit too, according to the study.

The study says, the overall impact of the measures would be to chop 3.4 per cent from total employment, in both the private and public sector.

According to the Office for Budget Responsibility (OBR) around 600,000 public sector jobs could be lost with the government cutting spending.

However, the fiscal consolidation may not lead to a double-dip recession, as feared, because job losses would be offset by lower interest rates, encouraging growth in the private sector, according to John Hawksworth, chief economist at PwC.