Unemployment leaps to 1.72million - the biggest jump since recession of 1992

There were 1.72million people out of work in the three months to July, up by 81,000 from the previous quarter and the highest total since the spring of 1999.

Union leaders warned that total unemployment could hit two million by next year, partly as a result of the Government's tougher benefits regime.

The jobless total could hit two million by next year, union leaders warn

The number of people claiming the jobseeker's allowance increased by 32,500 to 904,900 last month, said the Office for National Statistics.

Average earnings increased by 3.5 per cent in the year to July, 0.1 per cent up from the previous month.

The number of workers in manufacturing is down to its lowest since records began 30 years ago - dropping by 42,000 in the latest quarter to 2.87million.

There was also the first fall for more than a year in the UK's employment level, down by 16,000 to 29.54million in the three months to July.

Vacancies were down to their lowest level for more than a year to 613,200 after a fall of 56,900.

Fully a fifth of the working-age population is now economically inactive, with the number of people on long-term sick leave or looking after a relative, together with students or those who have given up looking for a job rising by 4,000 to 7.86 million.

The number of days lost through industrial disputes in July was 363,000, the highest monthly total for more than two years, largely as a result of strikes by local government workers.

Around 138,000 people were made redundant in the three months to July, up by 28,000 from the previous quarter - the highest figure for over a year.

Employment Minister Stephen Timms today insisted the UK labour market was still 'resilient'.

But Paul Kenny, general secretary of the GMB union, said: 'These figures hide the misery visited on ordinary families from what the Chancellor warned is the worst economic conditions for 60 years.

'Rising unemployment is yet another fall-out from the unchecked and unbridled reckless speculation in the financial and commodity markets. '

The TUC warned today that the number of people out of work for at least a year could almost double to 700,000 by the end of 2009.

And general secretary Brendan Barber said: 'Today's figures show that unemployment is starting to accelerate and it now looks very likely that total unemployment will reach two million during 2009.'

Nigel Meager, director of the Institute for Employment Studies, said: 'There is no doubt that a real economic downturn is now under way, and the case for lower interest rates to boost growth has strengthened.

'The first small fall in employment recorded this month is likely to be followed by larger falls in the months ahead.'

But he added: 'It is important to stress, however, that there is no evidence yet of an imminent jobs meltdown on a scale comparable to the 1980-83 and 1990-93 recessions, when employment fell by an average 50,000 per month, every month, over a three-year period.'