The recession has claimed another 220,000 jobs in the three months to June to take the total number of unemployed to 2.43 million, official figures have revealed.
Unemployment in the UK is now at its highest level since the summer of 1995.
The data from the Office for National Statistics (ONS) showed that the number of people claiming jobseeker's allowance increased by 24,900 in July to 1.58 million - its worst level for more than 12 years.
This marks the 17th consecutive month where the so-called claimant count has increased in the UK.
The jobless total of 2,435,000 will put further pressure on the Government to take steps to boost the economy.
Commenting before the latest figures were released Lord Mandelson, currently "minding the shop" in Downing Street while Gordon Brown takes a holiday, described unemployment levels as "unacceptable".
Youth unemployment rose by 46,000 to 722,000, while the number of people out of work for longer than a year remained at an 11-year high, up by 36,000 to 543,000.
And the ONS said the number of people in work fell by 271,000 between April and June to 28.9 million after a fall of 0.9% in the employment rate to 72.7%. This is the same rate seen earlier this year, which marked the worst since records began.
But there was some good news, with a slowdown in the number of redundancies - down by 9,000 quarter-on-quarter to 277,000 in the three months to June, although this was up 150,000 on a year earlier. Vacancies fell to a record low of 427,000 in the three months to July, down by 26,000 on the previous quarter and 203,000 on a year ago.
Manufacturing jobs fell again, by 212,000 year-on-year to 2.66 million in the three months to June, which remained at the lowest since records began in 1978.
