The number of people out of work in the UK has risen to 1.79 million, according to figures released today.
The rise by 164,000, to its worst level since 1999, is a huge blow for the Government.
A total of 1.79 million people were out of work in the quarter to August, an unemployment rate of 5.7 per cent, up by 0.5 per cent over the quarter and the highest since the spring of 2000.
The quarterly increase in the number of people out of work, including those not eligible for benefit, was the highest since the summer of 1991, when it jumped by 186,000.
The number of people claiming Jobseeker's Allowance increased by 31,800 in September to 939,900, the eighth consecutive monthly rise and the highest figure for almost two years. The total has now risen by 104,900 over the past year.
Employment levels have also slumped - down by 122,000 in the latest quarter to 29.4 million, the biggest three-monthly fall since 1993.
Latest data from the Office for National Statistics also showed a 46,000 drop in the number of manufacturing jobs to a record low of 2.87 million.
Paul Kenny, general secretary of the GMB union, said: "There are human stories behind these headlines. Left to itself things are likely to get worse and there is more gloomy news on the way.
"Now is not the time for faint hearts. The Government should use public spending to create jobs on projects like Crossrail and other transport infrastructure, on social housing schemes and items like ships and aircraft for the armed forces.
"There is also a need to get on with building nuclear power stations and developing green jobs for wind and wave power. This spending will keep people in work and boost confidence and is just as necessary as the bailout of the banks."
Other figures also confirmed fears that the economic slowdown is now hitting jobs and employment prospects.
A total of 147,000 people were made redundant in the three months to August, an increase of 28,000 on the previous quarter.
Meanwhile the number of people classed as economically inactive, including people looking after a relative, on long-term sick leave or who have given up seeking work, rose by 16,000 in the latest period to 7.89 million, more than 20 per cent of the working age population.
The number of unemployed men increased by 111,000 to over a million in the three months to August, while for women the figure rose by 52,000 to 732,000.
The figures also revealed that the number of people out of work for more than a year has increased by 35,000 to 440,000.
Unemployment among 18 to 24-year-olds was 559,000, up by 56,000 from the three months to May.
Average earnings increased by 3.4 per cent in the year to August, down by 0.1 per cent on the previous month.
Unemployment in the regions between June and August was (region, total unemployed, change on quarter, unemployment rate)
North East 96,000 plus 5,000 7.7%
North West 221,000 plus 14,000 6.6%
Yorkshire and the Humber 163,000 plus 17,000 6.2%
East Midlands 143,000 plus 13,000 6.2%
West Midlands 169,000 plus 4,000 6.4%
East 142,000 plus 10,000 4.8%
London 304,000 plus 39,000 7.5%
South East 200,000 plus 28,000 4.5%
South West 109,000 plus 3,000 4.1%
Wales 85,000 plus 10,000 5.9%
Scotland 124,000 plus 19,000 4.7%
Northern Ireland 35,000 plus 1,000 4.3%