Jobless level climbs to 2.47m as workers pay the price of recession

Unemployment remains on track to hit 3 million next year, or about one in ten of the workforce, trends in official data suggest, fuelling fears of a "jobs-lite" recovery.

The Office for National Statistics said yesterday that the unemployed total stands at 2.47million, up 210,000 in the three months to July, the highest in almost 15 years. The jobless rate rose 0.7 percentage points to 7.9 per cent. Youth unemployment among 16 to 24 year olds has reached 947,000. Around 34 per cent of school leavers cannot get work.

The numbers seeking Job Seeker's Allowance rose by less than the headline figure, by 24,400 to reach 1.61 million in August.

There was also a disturbing increase in the number of people categorised as "economically inactive" – that is those who have in effect left the labour force, and are not seeking a job. That rate rose to its highest since 1997, and the numbers have increased dramatically over the past year, with some offering euphemistic reasons for doing so. The ONS say that those describing themselves as "students" is up 154,000 on 2008, although the number of student places has increased by only 13,000.

Howard Archer, UK economist with IHS Global Insight, said: "Unemployment still seems likely to reach 3 million in 2010 or early 2011 and there remains a very real danger that it could rise even further. Even if the economy does return to growth in the third quarter, it is still unlikely to be strong enough to prevent further losses."

Paul Kenny, the general secretary of the GMB, added: "More workers, particularly young workers, are paying a devastating price for the recession and there is some way to go before unemployment stops rising."

The Work and Pensions Secretary, Yvette Cooper, agreed that it could be some time before the jobless total fell: "We know the evidence from previous recessions suggests that sometimes employers can wait until they feel more confident before they start recruiting again so there can be a lag."

The Organisation for Economic Co-operation and Development said yesterday that "the early stages of the economic recovery are likely to be too muted to result in strong job creation".