Unemployment is at a 14-year high of 2.47 million after a 210,000 rise in the three months to July, official figures showed today.
The number of people claiming jobseeker's allowance rose by 24,400 to 1.61 million in August - the highest since May 1997 and the 18th monthly rise in a row, according to the Office for National Statistics (ONS).
The recession's impact on young people was also underlined by jobless totals among 16-24-year-olds reaching 947,000 - the highest level since ONS records began in 1992.
The jobless rate among this age group is also a record 19.7 per cent, meaning one in five is looking for work.
Overall jobless totals are at their highest since May 1995.
The unemployment rate is now 7.9 per cent, up 0.7 per cent on the previous three months and the highest since November 1996.
The number of economically inactive people also rose to its highest point since ONS records began in 1971, at 7.99 million.
The employment rate was 72.5 per cent, the lowest level for more than 12 years.
Unemployment has now risen by 743,000 over the year as a whole and looks on course to pass the three million mark next year as the impact of the recession feeds through to rising dole queues.
Vacancies were down 12,000 to 434,000 on the quarter and in the suffering manufacturing sector, the number of jobs has fallen to 2.65 million in the three months to July - the lowest since comparable ONS records began in 1978.
The contrasting impact of recession on the public and private sectors was also shown by the 13,000 rise in public sector employees to 6.04 million in the quarter to June.
This contrasts with a 230,000 fall in private sector workers to 22.85 million over the same period, the ONS said.
For the public sector, average annual pay growth including bonuses was 3.4 per cent in July - almost three times the 1.2 per cent seen in the private sector and double the 1.7 per cent growth overall.
Paul Kenny, general secretary of the GMB union, said: "More workers, particularly young workers, are paying a devastating price for the bankers' recession and there is some way to go before unemployment stops rising.
"Yesterday the Tories threatened 10,000 jobs secured on building the aircraft carriers in Fife, Glasgow and Portsmouth and other parts of the UK.
"We need to be clear with the electorate - the Tory plan to cut public spending will stall an economic recovery and add to the dole queues. It is madness and must be opposed."
TUC general secretary Brendan Barber said: "There are now over a million people out of work for more than six months, more than one in three of them under 25. There are no signs of recovery here.
"This is not the time to take risks with policies that could make unemployment worse. It might look rosier in City dealing rooms but out in the real world unemployment is the number one issue."
Derek Simpson, joint leader of Unite, said the figures showed that the recession was "far from over".
He said: "Gordon Brown has charted a steady course through these troubled times and a break from Labour would shatter any fragile recovery.
"The Government's help for young people and new apprenticeships shows that Labour is committed to supporting jobs."
Sean Figg, of campaign group Youth Fight for Jobs, said: "Youth unemployment has reached 947,000. Job losses continue, and the prospect of getting another dims.
"Gordon Brown and David Cameron are calling for massive cuts in public spending - this will clearly have an impact on young people, especially those unlucky enough to be unemployed."
Unemployment in the regions between May and July was:
Region, Total, unemployed, Change on quarter, Unemployment rate
North East, 116,000, plus 13,000, 9.4%
North West, 293,000, plus 12,000, 8.6%
Yorkshire/Humber, 235,000, plus 24,000, 8.9%
East Midlands, 171,000, minus 2,000, 7.3%
West Midlands, 282,000, plus 33,000, 10.5%
East, 200,000, plus 20,000, 6.7%
London, 371,000, plus 42,000, 9.2%
South East, 264,000, plus 20,000, 6%
South West, 182,000, plus 26,000, 6.7%
Wales, 116,000, plus 7,000, 8.1%
Scotland, 187,000, plus 11,000, 7%
N Ireland, 53,000, plus 4,000, 6.7%Reuse content