Half a million private sector jobs could be lost as a result of upcoming public sector cuts, new research from PricewaterhouseCoopers has revealed.

The professional services firm has said in a report out today, called Sectoral and Regional Impact of the Fiscal Squeeze, that public sector cuts could lead to a reduction in private sector gross output of £46bn by 2014/15.

In total, PWC said the cuts could lead to 943,000 job losses in the private and public sectors by 2014/15. More than half of these could be lost in the private sector.

However, it also says the cuts would lead to more jobs in outsourcing.

John Hawskworth, PWC chief economist, said that although public and private sector job losses would be a “drag on the pace of the economic recovery, but should not derail it altogether”.

“Although the recovery may no be as strong this time as in the 1990s, we would expect at least some rise in private sector employment over the next five years despite the fiscal squeeze, bearing in mind that this squeeze could allow interest rates to remain lower for longer,” he said.

To read its full report click here: PWC report – Sectoral and regional impact

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