LONDON (Reuters) – Bringing Britain's record budget deficit under control will drive unemployment up towards three million and freeze wages for up to five years, Europe's biggest professional body for human resources said yesterday.

The Chartered Institute of Personnel and Development predicted about 725,000 jobs could go in the public sector as the Conservative-Liberal Democrat coalition government concentrates its deficit reduction on spending cuts.

That would result in more than one in ten public sector workers losing their jobs as the coalition slashes a deficit running close to 11 percent of national output.

"Unemployment will rise to a peak of 2.95 million in the second half of 2012 and remain close to that level until 2015," said John Philpott, CIPD's chief economic adviser.

"There is little prospect of real wage growth on average throughout this period."

Two and a half million British workers – eight percent of the workforce – were unemployed in the three months to March.

Britain's deficit reached £156 billion ($227 billion) in the fiscal year that ended in April and the government has indicated cuts of around 20 percent could be on the cards at many government departments.

Heavy job losses in the public sector is likely to fuel industrial unrest and could expose cracks in the coalition partnership.

The larger, centre-right Conservatives are ideologically tied to reducing the size of the state while the grassroots supporters of the more left-leaning Lib Dems are unlikely to welcome such hefty cuts in the public sector.