Any escalation of the current crisis in the Eurozone could have “severe” consequences for UK unemployment, according to a spokesperson for the Centre for Economics and Business Research (Cebr).

The International Monetary Fund (IMF) has warned this week that the world economy, including the Eurozone and the US, are in danger of tipping back into recession.

“The Eurozone crisis has dramatically increased the risk of a double-dip recession. We think the chances of the UK going through one are about 40%. Although it is likely that this quarter will show a contraction in output, two consecutive quarters of negative growth are slightly less likely.

“In terms of what this means for UK job creation, we saw last week that in Q2, 100,000 public sector jobs were shed but only 41,000 were created. The slow pace of growth means the private sector is not offsetting the impact of public sector job losses, which ultimately means that unemployment will continue rising for some time. We think unemployment will peak at 8.3% in 2013 and will start falling once the economic recovery gets more of a foothold.

“If the Eurozone crisis does escalate then the consequences would be more severe for unemployment. The situation is particularly difficult because most of the policy measures have been exhausted. The government has already spent a tonne of money in the last recession and we still have this huge fiscal defecit and interest rates are at rock bottom levels.”