Unemployment has soared to almost 2.4 million after a record number of people joined the ranks of people out of work, grim new figures showed today.
The figure rose by 281,000 in the three months to May, the biggest quarterly increase on record, taking the total to 2.38 million, the highest since 1995.
The number of people claiming jobseeker's allowance increased by 23,800 in June to 1.56 million, the worst total since Labour came to power in 1997.
The so-called claimant count has now increased for 16 months in a row and is over 700,000 higher than a year ago.
Youth unemployment has jumped to a 16-year high of 726,000 after a quarterly rise of 95,000, while the number of people out of work for longer than a year rose by 46,000 to 528,000, the highest for 11 years.
Meanwhile the number of people in work fell by 269,000 in the latest quarter to 29 million after a record fall of 0.9 per cent in the employment rate to 72.9 per cent.
More than 300,000 people were made redundant in the three months to May, the second highest figure on record, and a rise of 31,000 on the previous quarter.
Other data from the Office for National Statistics showed that vacancies fell to a record low of 429,000 in the three months to June, down by 35,000 from the previous quarter.
Manufacturing jobs continued to fall, down by 201,000 over the past year to a record low of 2.6 million.
Average earnings increased by 2.3 per cent in the year to May, up by 1.4 per cent on the previous month.
The number of people classed as economically inactive, including those on long term sick leave or who have given up looking for a job, increased by 64,000 in the latest quarter to 7.92 million, 20 per cent of the workforce.
The number of unemployed men increased by almost 200,000 to 1.46 million, while 84,000 more women were out of work, taking female unemployment to 923,000, today's figure revealed.
TUC general secretary Brendan Barber said: "Today's figures are truly horrendous. The people who have lost their jobs this month and who fear they will in months to come are not talking of recovery or green shoots.
"It's particularly worrying that over half a million unemployed people have been out of work for at least a year, including 133,000 young unemployed people. With a new generation of school and college leavers soon starting to look for work, our unemployment crisis will get even bigger.
"Yet rather than treat unemployment as a national emergency, growing numbers of politicians are calling for deep public expenditure cuts. This will make the recession far worse - 200,000 nurses, teaches and other public servants will join the dole queue, private companies will lose business, public services will deteriorate and the deficit will get worse.
"The Government must do all it can to tackle joblessness and the permanent scar of long-term unemployment."
David Breger, a partner at chartered accountants HW Fisher, said: "These figures will make extremely grim reading for Britain's embattled businesses.
"The recession continues to take its toll on the thousands of small and medium-sized businesses that are the lifeblood of this country's workforce, businesses that have been left high and dry by the banks' reluctance to lend.
"It must be particularly galling in the same week that Goldman Sachs, bailed out by the US Government, announcing better-than-expected profits."
Paul Kenny, general secretary of the GMB union, said: "Across the country people are paying a very high price for this bankers' recession as unemployment heads back to the three million seen in the Tory years.
"The news that Goldman Sachs intend to restart paying billions in bonuses to bankers adds insult to injury and makes the case for punitive levels of taxation to stop the elite cocking a snoop at ordinary taxpayers who recently bailed them out."
The Prince's Trust said a young person had become unemployed almost every minute in the last three months.
Chief executive Martina Milburn said: "We need to help young people into work before they become a lost generation.
"Nearly two fifths of those who became unemployed in the last three months were young people."
Graeme Leach, chief economist at the Institute of Directors said the figures gave out mixed messages adding: "Unfortunately for the Government unemployment will peak at three million plus just before the next General Election in 2010."
David Kern, chief economist at the British Chambers of Commerce, said: "These figures make grim reading and confirm our assessment that although the recession is easing unemployment is set to continue rising at a rapid pace.
"On the basis of these numbers we reaffirm our forecast that unemployment will peak at around 3.2 million next year."
Michelle Mitchell, charity director for Age Concern and Help the Aged, said the number of workers over the age of 50 who had become unemployed had soared by 56% over the past year, the highest percentage increase among any age group.
"At a time when many people need to work for longer to boost dwindling pensions and savings, older workers are being shut out of the job market by the thousands. With only a one in five chance of being in work two years later, these baby boomers are likely to slip into an early retirement in poverty.
"As if the threat of unemployment wasn't enough, the default retirement age, which allows employers to retire employees at 65, is adding to the uncertainty experienced by older workers. Rather than talking about reviewing this regulation, the Government should scrap it without further hesitation."
Shadow work and pensions secretary Theresa May said: "Unemployment is casting a dark cloud over the economy, ruining the lives of millions. Whilst the economic cost is great, the human cost is incalculable.
"Labour are in denial about the true scale of the problem, with ministers continuing to sleepwalk their way through the recession.
"We need Yvette Cooper (Work and Pensions Secretary) to wake up and allow people on Jobseeker's Allowance to immediately retrain instead of making them wait six months."
John Wright, chairman of the Federation of Small Businesses, said: "The FSB is calling on the Government to provide a Government-funded wage subsidy for employers who want to retain employees but are forced to cut staff hours because of costs."
Michelle Luxford, of hotel chain Travelodge, said: "Whilst certain industries and locations are clearly suffering, there are numerous employment opportunities being made available through British holidaymakers staying at home this summer.
"We have had a record number of applicants for all positions at our Clacton-on-Sea hotel, which opens in August, with over 100 people trying for the manager's position alone."
Katja Hall, director of employment policy at the CBI, said: "This hefty rise is in line with our forecast and reflects the tough climate that businesses face. Sadly, more and more jobs will be lost in this difficult recession and we expect unemployment to peak at three million next spring.
"Businesses and staff are doing their utmost to protect jobs, and in many firms we have seen a spirit of flexibility around pay and hours to try to limit redundancies.
"The rise in youth unemployment is particularly worrying and the Government must target more help to prevent long-term damage to a generation."
Nigel Meager, director of the Institute for Employment, said: "The fastest growing group of unemployed is now those who have been claiming benefits for six to 12 months. Meanwhile, shorter-term unemployment has actually fallen slightly, for the second month in a row.
"As this trend continues, it is important that the focus of Government policy remains on the mounting problems associated with long-term unemployment.
"The picture is also being affected by the stricter tests faced by jobless people with health problems wishing to claim the new Employment Support Allowance, which mean that many more people with intensive support needs will enter the unemployment register rather than receiving sickness-related benefits."
Clare Tickell, chief executive of charity Action for Children, said: "As unemployment in the UK continues to increase, the Government must do more to help those who we know are more likely to suffer in these difficult times - vulnerable young people.
"Times are tough, but the future will be even tougher unless we make sure opportunities are available to the most disadvantaged, such as care leavers, to equip them with the skills and self-confidence they need to get a job and improve their future prospects."
Workers losing their jobs are fuelling a volunteering "boom" as they look to maintain or enhance their skills, according to veterinary charity PDSA, which reported a 21% increase in the number of volunteering inquiries during the first half of the year.
Unemployment in the regions between March and May was: (region, total unemployed, change on quarter, unemployment rate)
North East, 115,000, plus 10,000, 9.2%
North West, 283,000, plus 16,000, 8.3%
Yorkshire and the Humber, 232,000, plus 41,000, 8.8%
East Midlands, 169,000, plus 12,000, 7.2%
West Midlands, 276,000, plus 52,000, 10.3%
East, 187,000, plus 12,000, 6.3%
London, 348,000, plus 28,000, 8.6%
South East, 269,000, plus 47,000, 6.1%
South West, 167,000, plus 26,000, 6.2%
Wales, 107,000, minus 1,000, 7.5%
Scotland, 179,000, plus 35,000, 6.7%
N Ireland, 50,000, plus 4,000, 6.3%