Unemployment hits 14-year high

The increase in the latest three-month period was a record 281,000, pushing the overall figure up to its highest level since October 1995. As a result the unemployment rate leapt to 7.6 per cent, its highest level since January 1997. And the number of long-term unemployed, defined as people out of work for longer than a year, hit an 11-year peak.

But as with other recent employment releases it was the level of youth unemployment which aer likely to create the most ripples. The amount of 18-24 year olds who are unemployed rose to an eye-watering 17.3 per cent, with a third of 16-17 year old school-leavers out of work. That leaves a million young people unemployed and comes just as a new swathe of students and school-leavers hits the jobs market, raising fears of a lost generation with no jobs and requiring state financial support.

Economists believe that unemployment will continue to rise past 3m into next year, which has its own negative implications for any economic recovery. At least 1.6m people are already claiming unemployment benefits, putting further strain on public finances. And as Jaguar announced plans to cut 300 further jobs at its plant in Merseyside it brought into focus the scale of pay-cuts and job losses across the country.

WHAT THEY ARE SAYING:Allan Monks, at JP Morgan, in the Daily Telegraph: "Although employment will likely continue to fall for several months to come, the analysis we are working on at the moment suggests that these signs of flexibility in the labour market will help to limit the pace of overall job losses, and shorten the period of labour market adjustment relative to prior recessions."

Larry Elliott, in the Guardian: "Far from being a testimony to Britain's flexible labour market, the real messages from today's data are that demand for labour is weak and there is a risk of a rerun of the 1980s, when a generation of young people was scarred by a prolonged period out of work." ·