A further 100,000 people will be without a job by the end of the summer, according to an analysis published today by the Institute for Public Policy Research (IPPR).
Amid growing concern that Britain is heading for a jobless rebound, the think tank estimates that 50,000 men and 50,000 women will join the ranks of the unemployed over the next five months. Young people have been especially hard hit by rising unemployment, with 1.04 million 16- to 24-year-olds without work. That number is expected to increase by 41,000 over the coming months.
According to the analysis, 100,000 public sector positions will be shed as the government's programme of spending cuts continues. And while the private sector is expected to create some 200,000 new positions, this will be matched by the growth in the numbers looking for work, resulting in a net increase in the jobless figure.
The official unemployment statistics for November to January showed the UK jobless rate at 8.4 per cent, a 17-year high, with 2.67 million out of work. George Osborne's fiscal watchdog, the Office for Budget Responsibility, has forecast that unemployment will peak at 8.7 per cent in September 2013 before falling steadily.
Kayte Lawton, an IPPR research fellow, said the analysis underlined the need for urgent measures to boost employment. "The risk is that high unemployment becomes a permanent feature of the UK economy, as it did in the 1980s" she said. "Even within the context of the Government's deficit reduction plan, it is short-sighted of the Government not to do more to get people back into jobs."
Karl Turner, the Labour MP for Hull East, said: "We've got to be honest: without a plan for growth the North-South divide is going to get worse. The young people that I've spoken to are desperate."
The ability of the private sector to create enough jobs to replace those shed by the public sector has been disappointing. Since the Coalition took power in May 2010, the public sector shrank by 350,000 jobs and the private sector has created just 320,000 jobs.
Liam Byrne, the shadow secretary for work and pensions, said: "This IPPR analysis showing that unemployment is set to continue to rise for months to come is extremely worrying, and it underlines how urgently we need this government to finally get serious about getting people off benefits and into work."
A Department for Work and Pensions spokesman said: "There have been some encouraging signs that the labour market is stabilising, but there is clearly still a big challenge ahead. The international economic outlook remains difficult, but we will do everything we can to help the unemployed find jobs."
Case study: 'I thought more study would help'
Michael Royce is a 26-year-old living in London. Despite having two degrees and speaking three languages, he has not been able to find a permanent job.
I finished my Master's degree in International Relations in November last year. Since then I have been applying for jobs and have found very little. I left a very good job to go and study more because I thought it would improve my job prospects, but now I am only able to find work with employment agencies where the jobs rarely last longer than a week. I have been doing everything from letter-stuffing to admin work in a bank.
"It's very frustrating. I spent five years at university and I thought that would be enough to get a career.
"It's difficult to make long-term plans at the moment. I will pretty much take any job."