Unemployment to breach 2mil

Last month figures showed almost 1.98 million people, including those not eligible for benefit, were looking for work.

The latest numbers to be published by the Office for National Statistics are set to show more people are unemployed since labour came to power in 1997, when the total was just over 2 million.

Job losses have continued to mount across British industry in recent weeks, leading to fears that unemployment will soar well over 3 million in 2010, using the International Labour Organisation (ILO) measure, which counts people not eligible for benefit.

Howard Archer, chief economist at Global Insight, said he predicts the latest figures to show a rise of 176,000 for the three months to January, taking unemployment to 2.04 million.

He added that the unemployment rate is expected to jump to 6.6 per cent, while the number of people claiming jobseeker's allowance increased by 90,000 in February, following a rise of 73,800 in January.

This would be the largest monthly increase since March 1991 and take claimant count unemployment up to 1.323 million.

He added that the claimant count unemployment rate is forecast to rise to 4.1 per cent in February from 3.8 per cent in January.

Mr Archer said: "Reports of companies laying off workers are prevalent, while an increasing number of companies are folding.

"With the economy seemingly set to contract through 2009 and very possibly beyond before starting to recover gradually, we expect unemployment to rise to a peak of 3.3 million on the ILO measure around late-2010/early-2011. This would give an unemployment rate of around 10.5 per cent."