UK unemployment reached 1.97m between October and December, according to the Office for National Statistics.

The number of people out of work jumped 146,000 for the quarter.

The UK’s unemployment rate has now hit 6.3%, the highest since 1998.

John Philpott, chief economist at the Chartered Institute of Personnel and Development (CIPD), says: “It was widely expected that official figures would have shown there were more than 2m people unemployed at the end of 2008.

“It is likely that the published quarterly statistics were still affected by the inclusion of data from the early autumn before the second wave of the credit crunch started to have a big impact on employers recruitment and redundancy plans.

“Perhaps even more surprising is that the latest figures on the number of people claiming Jobseekers Allowance increased by a less than expected 73,880 in January, with little monthly change in the number flowing on to the count but an increase in the number flowing off the count. This is especially puzzling when set against a sharp quarterly rise in redundancies and a further fall in the number of vacancies.”

Hugo Sellert, head of economic research at Monster, adds: “The job market is an obvious casualty of the deepening recession. Online advertised vacancies reached a two-and–a-half-year low in January.
 
“There are some bright spots though. Demand remains strong for healthcare, education and other public sector workers as government programmes work to offset private sector job losses.”