Grainne Gilmore
Get 20% off your bill at Pizza Express
UK unemployment has surged at the fastest pace in 17 years by 164,000 to 1.79 million and could rise even further to two million by the end of the year.
The rise in unemployment during the three months to August marks the biggest increase since 1991 while the number of people claiming jobless benefits rose by 31,800 over in September.
David Blanchflower, a member of the Bank of England's rate-setting committee has predicted the ILO measure of unemployment could hit two million by the end of the year.
The total number of people in employment slumped by 122,000 in the three weeks to August, the largest drop since early 1993.
Prime Minister Gordon Brown refused to comment on today's figures, which one economist described as "grim", but said he would do everything possible to keep people in jobs.
“We will do everything we can to help create jobs and help people maintain jobs in the British economy," said Mr Brown.
Alan Clarke at BNP Paribas, said: "Employment is falling off a cliff and it is still early days in this slowdown."
Brendan Barber, TUC general secretary, said: “This is extremely bad news, and these figures do not even show the effects of the bank crash. After years when we could take reasonably full employment for granted, we are now in for grim times. This is the next big challenge for Government.”
The dismal figures came as it emerged that nearly thousands of public sector workers will lose their jobs over the next two years.
The Bank of England will now come under increasing pressure to make another significant cut in interest rates after last week's emergency half point cut to 4.5 per cent.
Some experts say that the Bank could cut rates to as low as 2 per cent in an effort to shore up the flagging economy.
Howard Archer, chief UK and European economist at Global Insight, said: "We expect interest rates to be cut by at least another 50 basis points before the end of the year, very possibly as part of further coordinated central bank action."
Some 9,891 jobs in the prison, probation and court services will be cut as the Ministry of Justice seeks to save £900 million, The Times revealed this morning.
There are also fears that job losses in the financial sector could surge as Lloyds TSB takes over HBOS, the biggest mortgage lender in the UK. Analysts say it is likely that thousands of bank workers and call centre staff will lose their jobs as the combined group slims down its workforce.
Workers are already under increased pressure as the cost of living has soared over the last year. Inflation rose to a 16-year high of 5.2 per cent last month, and although inflation is forecast to start falling soon, the increased cost of food, energy and homeloans could plunge those who lose their jobs into financial hardship.
This, in turn, could heighten the risks of families losing their homes. Bob Pannell, of the Council of Mortgage Lenders, said yesterday that repossessions could rise further next year as unemployment increases. Repossessions are set to rise by 50 per cent to 45,000 this year.
Business groups have been warning that unemployment is set to rise as the country teeters on the edge of recession. The CBI forecasts that unemployment will rise by 330,000 to 2.12 million by the end of next year, while the British Chambers of Commerce said that the number of people out of work could rise by 350,000 over the next 12 months.
The TUC gave a gloomier forecast, predicting that the number of people out of work for a year or more could rise by 700,000.
But Vicky Redwood, of Capital Economics, said that unemployment could rise to 3 million by the end of the 2010, leveis not seen since the last recesssion in the early 1990s. "With the UK heading into recession, we expect this measure to rise by a total of 1.5 million to around 3 million by the end of 2010," she said.
Industry sectors news at a glance. Interactive heatmap, video and podcast
The inside track on current trends in the charity, not for profit and social enterprise sectors
Explore your passion for food with the delights of Thai, Indian & Chinese cooking
Read our exclusive 100 Years of Fleming and Bond interactive timeline, packed with original Times articles and reviews
Everything the Business Traveller needs to know to make a better trip
Shortcuts to help you find sections and articles
05/2005
£13,500
08/2008
£109,950
2006
£10,750
Great car insurance deals online
£100k
The National Skills Academy for Social Care
London
£49,229 - £62,035 pro rata
Charity Commission
London/Liverpool/Taunton
£75k - £85k
Confidential
London
Six Figure
Rolls Royce
Midlands/Europe
From £89,950
Great Investment, River Views
$3.5 million
Also avaliable for rent
Times Online Property Search will help you find it
Amazing Far East Offers - Visit Hong Kong
from £499pp
Cruise the Islands of Hawaii - Pride of America
List your property with two leading travel websites
Great travel insurance deals online
Contact our advertising team for advertising and sponsorship in Times Online, The Times and The Sunday Times, or place your advertisement.
Times Online Services: Dating | Jobs | Property Search | Used Cars | Holidays | Births, Marriages, Deaths
News International associated websites: Globrix | Property Finder | Milkround
Copyright 2008 Times Newspapers Ltd.
This service is provided on Times Newspapers' standard Terms and Conditions. Please read our Privacy Policy.To inquire about a licence to reproduce material from Times Online, The Times or The Sunday Times, click here.This website is published by a member of the News International Group. News International Limited, 1 Virginia St, London E98 1XY, is the holding company for the News International group and is registered in England No 81701. VAT number GB 243 8054 69.
Interesting read today in the Australian newspapers of EXPAT Aussies coming home by the droves from the US and UK. We certainly are not in such a mess YET and hopefully won't be. Only time will tell.
dave, logan, Australia
I can think of a least 20 changes in last 17 years
to the way that benefits are claimed.
So where's the comparison ?
The figures are meaningless.
M Walker., Nr Bromsgrove., Worcs.
Now the real result of labours immigration policies will be shown - high unemployment and the resultant cost to the taxpayer in benefits.
Tim, Sherborne, England
2million officially unemployed by Christmas. Plus half of the 3 million claiming incapacity benefit who actually could work; plus goodness knows how many on various work experience schemes. Gordon & Labour have driven this country into the ground. Shame we can't make 300 Labour MPs redundant as well
Donna Walker, Effingham, England
You can't buck the market with Bank bailouts or job creation; a simple lesson from our greatest PM of recent years Margaret Thatcher.
john, milton keynes,
please can someone explain how a service economy without an industry to sservice can exist when it has transferred its technology abroad ??
christopher murley, arthenac, france
Brown said the government were going to launch projects to employ people to insulate people's homes.I worked doing exactly that nearly 30 years ago,it was a Tory Government scheme that kept me off of the unemployment figures for a year and very little else,Labour at the time slated such schemes.
Dave, Plymouth,
Gordons constituents get free prescriptions his kids will get free university education his old people will get free nursing home care. We will never get rid of Scotland now, they know when they are on to a good thing.
SO WHEN DO WE MEET AND DEMONSTRATE IN LONDON
we English used to be much braver.
GM Garratt, Rugby, England
Does anybody have the figures for how many people working and how many people on the take in the UK including unemployment ,sick ,incapacity ,asylum seekers etc.
andy, poole, dorset
My God, we're in a mess. I can't see any way out of it. We don't have the required wealth production, or it gets throttled by EU regulations. We've been mismanaged for years. What are we to do?
Welfare state, economy, immigration, debt levels.
The Labour party are pathetic. Where do you start?
Np, England, UK
Surely in 2008 the banks and mortgage companies could come up with a rent back scheme, until the people concerned financial stata improved. Instead of repossessing houses from families which does nobody any good least of all any children involved, and puts more of a tax burden on everyone.
Ed Chalkley, Corseul, France
I could see why they weren't cutting interest rates earlier due to inflation worries. However Brown has committed a shocking error by not cutting fuel duty. Firms have gone bust and jobs lost, that could have been saved. Now they will cut interest rates more and wipe out savers income.
Fred, Moray, Scotland
Lucky Mr Brown has made our public sector so bloated. Imagine how high the unemployment figures would have been without the massive increase in public sector employment since labour came to power. This is all mortgaged up to the hilt as well. Who's going to pay for all those Final Salary pensions?
Scott, Aberdeen,
i could think of another 630 or so i would like to see added to that number plus all there minions in local govt as well
m gaskell, cardiff, wales
I strongly reccomend doing ANYTHING you can to keep hold of your job. I have a computer science degree and after months of job hunting, 4 weeks of waiting for job seekers allowance, (they're UTTERLY useless) I'm packing boxes into lorries from monday. Expect no help and no new job of any skill level
Louis, Birmingham, England
Bury that one in spin Gordon - the sooner we are rid of this amateur politician the better. He is only interested in votes for Labour not the country. Dont be fooled by the spin this government is incompetent.
rob, derby, uk
Spin your way out of this zanulabour.
Youre toast.
ronnie, bucks, UK
Capt Brown was in charge of the UK Titanic & steered it into the iceberg.
He borrowed, borrowed some more & when told of all debt piling up, he borrowed even more! He's morgaged this country's future to feed the public sector monster & the housing market - setting 'the example' to the bankers!
Phil, Preston,
"3 million unemployed by 2010"-does that include the 3.5 million currently "on the sick"?
steve, West Midlands, Great Britain
another legacy of Mr Brown. How much will this one take to sort out ?
Mike, Sole Street, England
This governments record: hit unemployment targets by creating huge numbers of additional public sector positions. Over-tax and over-spend. Nothing left in the pot to support struggling industry or the rising unemployed. Public sector jobs now need to go. Economy down tube. Sterling job Brown!
Richard Lees, Ashton-u-Lyne, England
Why do I keep picturing that 1970's poster, (labour's not working) in my mind? History repeating itself or rather labour is.
lowen, M'cr, UK
Gordon Brown - the Man of the Mantra. What possible question could you put to him that he would not commence his answer with "We are doing everything possible to ........"? And when it comes to his idea of who needs protection it is always pensioners, first time buyers and children.
Chris, London,
What a load of crooks who caused this to happen. Now pensioners who have retired to safer countries like Spain could suffer a reduced pension if the pound goes down against the Euro, even if as expected the pension goes up as it should. And as for those who have been diligent and saved.
B J Deller, Marbella, Spain
Err, 'Hero Gordon' refused to comment? No magic formula this time?
Ian , Bristol,
Flash Gordon threatens to do all in his power to save jobs. Sound like he is going to spend all our money again to save his own skin.
albert hall, hove, england
Since Europeans seem to think Obama should be "President of The World" why not ask him what to do????
Maybe if he looses in the US, he could run for PM.
You love him so much You Take Him!!!
George, Florida, USA
Amazing how the government and business leaders failed to pick up on the warning signs in the financial system that were flashing red much earlier . Much harder and more costly to put out a fire once started. They failed to see that inflation cannot feed on itself in a collapse of credit/confidence.
Robert Cookson, Milton Keynes, UK
Prime Minister Gordon Brown refused to comments on today's figures, but said he would do everything possible to keep people in jobs. “We will do everything we can to help create jobs and help people maintain jobs in the British economy," he said.
Except reduce red tape
Kevin, Workington, Cumbria