The Government was given grim jobs news ahead of the Budget today when new figures showed that unemployment has soared to its highest level since Labour came to power in 1997.
At the same time, it was also announced that public borrowing soared to a record £90 billion in the last financial year. There was some good news for the housing market, with lending picking up.
The number of people looking for work jumped by 177,000 in the three months to February to reach 2.1 million - the biggest quarterly rise since 1991. The total is the worst since February 1997, a few months before Labour won the general election.
The number of people claiming jobseeker's allowance increased for the 13th month in a row in March, up by 73,700 to 1.46 million, the highest total since September 1997.
A raft of other gloomy figures from the Office for National Statistics showed continuing cuts in manufacturing jobs, a record low number of vacancies and the lowest rise in average earnings since 1991.
Meanwhile economic inactivity, including people on long-term sick leave, those taking early retirement or who have given up looking for work, remained at more than 20 per cent of the workforce at 7.85 million.
Average earnings increased by just 0.1 per cent in the year to February, down by 1.6 per cent from the previous month, while the figure excluding bonuses was down by 0.3 per cent to 3.2 per cent. Both figures were record lows.
The UK now has an unemployment rate of 6.7 per cent, the highest since the summer of 1997, today's figures showed.
The number of manufacturing jobs fell by 139,000 in the quarter to February, compared to the previous year, to reach a record low of 2.75 million. Job vacancies fell by 68,000 in the quarter to March to a record low of 462,000, while a record 270,000 people were made redundant in the three months to February.
The ONS also reported a fall in the number of people in work in the quarter to February, down by 126,000 to 29.27 million, the lowest since last autumn. Private sector employment fell by 13,000 to 23.6 million in the final few months of last year, while the number of workers in the public sector increased by 15,000 to 5.78 million.
Long-term unemployment rose by 49,000 to 481,000 in the three months to February, compared with the quarter to November. Unemployment among 18 to 24-year-olds was 631,000 in the latest quarter, up by 17,000 from the three months to November. There were 15,000 working days lost due to industrial disputes in February, the highest number since last September.
TUC general secretary Brendan Barber said: "These are another set of grim figures. There are no green shoots here, and there will be no real recovery until unemployment starts coming down. Mass unemployment drains public finances, ruins lives and blights communities. Everything in today's budget must be designed to create or save jobs."
Employment minister Tony McNulty said: "We know that times are tough and these figures are disappointing. However, lots of people are still finding work and while there were 363,500 new claims for JSA (jobseeker's allowance) last month, over 275,000 people flowed off unemployment benefits - that's an increase of 22,500 from last month.
"We will not give up on people and will do everything we can to make sure that if you become unemployed we can help you get back to work as quickly as possible. The extra package of support at both day one and six months of a claim is now available and being used to help people back into work.
"We have also invested £2 billion to ensure Jobcentre Plus can continue to offer all its customers a first class service."
Unemployment in the regions between December and February was:
Region, Total unemployed, Change on quarter, Unemployment rate
North East 105,000 no change 8.3%
North West 267,000 plus 11,000 7.8%
Yorkshire/Humber 191,000 plus 14,000 7.3%
East Midlands 157,000 plus 24,000 6.8%
West Midlands 223,000 plus 36,000 8.4%
East 175,000 plus 15,000 5.8%
London 320,000 plus 22,000 7.9%
South East 222,000 plus 15,000 5.0%
South West 131,000 plus 13,000 5.2%
Wales 108,000 plus 10,000 7.5%
Scotland 143,000 plus 5,000 5.4%
N Ireland 46,000 plus 12,000 5.7%
* Public borrowing soared to a record £90 billion last financial year, official figures showed today. The figure came as net borrowing for March hit £19.1 billion, also the highest level for a single month since records began in 1993, the Office for National Statistics said.
Borrowing for the year represented 6.19 per cent of gross domestic product - the highest since 1993 - and was £55.3 billion more than 2007/8. It is far higher than the prediction of £78 billion in net borrowing for the year that Chancellor Alistair Darling made in his Pre-Budget Report last November.
* Mortgage lending rose by 16 per cent during March in a further sign that activity in the housing market is beginning to pick up, figures showed today. A total of £11.5 billion was advanced during the month, up from £9.9 billion in February, according to the Council of Mortgage Lenders.
But the group warned that although the market was showing signs of stabilising, transactions remained at a low level, with lending 52 per cent lower than in March 2008.
The figures came as HM Revenue & Customs published data showing that the number of homes changing hands soared by 40 per cent during March. Around 60,000 homes in the UK were sold for more than £40,000 during the month, up from 43,000 in February. Property sales were at their highest level since October last year, although they were still more than a quarter lower than in March 2008.
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