The number of Britons claiming unemployment benefit rose for a seventh consecutive month in August and by its biggest amount since December 1992 as a deepening economic slowdown dealt the job market a heavy blow.
Figures from the Office for National Statistics today also showed the number of people in work in the three months to July fell for the first time since the beginning of 2007.
"The number that sticks out is that claimant count increase," said Alan Clarke, an economist at BNP Paribas.
"It really backs up the case for sharp increases in unemployment, reinforcing the drag on the consumer and more of the same likely to come for many months.
The claimant count leapt by 32,500 in August, far more than the 22,300 forecast, and July's figure was also revised up by more than 7,000.
The figures were released at the same time as minutes of the Bank of England's latest policy meeting which showed only one policymaker voted for a rate cut. Market reaction to the data was muted with traders taking their cues from sharp gyrations in stock and money markets.
Average earnings including bonuses ticked higher to 3.5 per cent in the three months to July from 3.4 per cent in the three months to June. Still, earnings growth remained subdued and well below the rate of inflation meaning Britons' wages are falling in real terms.
The internationally recognised ILO unemployment figure rose by 81,000 in the three months to July, the biggest jump in more than two years, taking the total to 1.724 million, the highest in more than nine years.
Bank of England policymaker David Blanchflower has warned that two million Britons could be out of work by Christmas and voted to cut interest rates by 50 basis points this month, breaking ranks with his fellow monetary policy committee members who opted to leave rates at 5 per cent.
Analysts said the rise in unemployment and continued muted wage growth, bolstered the case for rate cuts, maybe this year, despite inflation running at more than twice the two percent target.
"The risk is that activity is much softer than the Committee expects and there's a growing risk that the MPC will have to bring rates down before the end of the year," said Philip Shaw, economist at Investec.