The seasonally-adjusted figures took the jobless rate to 9.9 per cent and prompted Gillian Shephard, the Secretary of State for Employment, to cut short a business trip in Russia and fly back to London yesterday morning.
The increase in the jobless total was the 28th consecutive monthly rise and nearly double the figure expected by the financial markets.
Robert Lind, an economist with stockbrokers UBS Phillips and Drew, said: 'The size of the August increase surprised everybody after recent monthly rises of 20,000 and 30,000 a month. Three million unemployed is on the cards for early next year.'
Michael Forsyth, the Minister of State for Employment, said he was very concerned about unemployment and was reviewing measures to get people back to work.
'The UK economy is going through a difficult period, and this is reflected in today's figures. I am very concerned about the level of unemployment.'
He was criticised by Joyce Quin, Labour's employment spokeswoman, who said the figures showed 'yet more evidence of the Government's appalling economic mismanagement'.
The largest rises in unemployment again were in the South-west and South-east, where 20,500 joined the dole queues last month. The number of unemployed increased in all regions, leaving Northern Ireland (14.9 per cent), the North (11.4 per cent) and the West Midlands (10.8 per cent) with the highest jobless rates. The areas with the lowest rates were East Anglia (7.8 per cent) and the East Midlands (8.9 per cent).
The Government had better news on wages, indicating that inflation pressures remained moderate.
The annual increase in average earnings in the year to July was 6 per cent, down by a quarter of a per cent from the previous month and the lowest since 1980.
Unit wage costs in manufacturing in the three months to July rose 2.5 per cent from a year ago.
Economists said this reflected recent pay settlements around 4 per cent, lower earnings growth and the continuing shakeout in the workforce.
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