Jobless total leaps by 230,000

Unemployment has risen to a new peak of 7.2 per cent, the highest rate since July 1997 as a result of the economic downturn. The jobless total gained by 232,000 in the first quarter of the year, according to the Office for National Statistics, meaning that 2.261m Britons are now out of work.

Union leaders and opposition politicians alike attacked the government over the figures. But while they looked poor, there was a glimmer of light in the number of people claiming jobseeker’s allowance in May. This rose by 39,300 to 1.54m, a smaller amount than had been expected by analysts, who had forecast an increase of 60,000.

The figure was taken as an indication of the improvement in the economy since this March and was seized on by the government as a sign of further improvements to come. Business secretary Lord Mandelson said "It's an encouraging signal but there is at the same time too much unemployment and any difficulty people have in finding jobs requires the government to continue taking the action that we are in delivering real help in the job search and training for people who are affected."

Young people were particularly hard-hit in the period, with the unemployment rate for those between 18 and 24 at 16.6 per cent. The figure is at its highest rate for nearly 16 years and is set to get worse in the near future when graduates and school leavers come onto the jobs market this summer.

WHAT THEY ARE SAYING:Alan Tomlinson, partner at UK insolvency practitioners Tomlinsons, the Guardian: "From where I'm standing things are as bad now as they were a few months ago. The small and medium-sized companies that we deal with each day are still being decimated by sharp drops in turnover, growing debts and, critically, the ongoing failure of the banks to lend."

David Kern, chief economist at the British Chambers of Commerce, on BBC.co.uk: "These jobless figures are slightly better than feared, but the overall situation remains grim... It is much too early to talk about the end of recession and it is important not to withdraw the policy stimulus before there is firmer evidence that the economy has stabilised." ·