When official unemployment figures revealed the worst decline in Britain’s labour market for a decade last week, the news came as no surprise to Jean Rocket.

She and her colleagues at Oscar Mayer, a Somerset company that makes preprepared meals for super-markets such as Sainsbury’s, have been told there will be redundancies, but they don’t yet know who will be affected or when they will go.

“Morale is very low because no one knows what’s happening,” she said. “It’s difficult to find work in this area and there are many families who are totally dependent on the factory for their livelihoods.”

The Office for National Statistics data show that the rate of unemployment is now 5.5%, the number of job-less increased by 81,000 over the quarter to reach 1.72m and the redundancy level for the three months to July 2008 was 138,000.

But the bad news does not end there. Some commentators, notably the Bank of England monetary policy committee’s David Blanchflower, who is pushing for a cut in interest rates, believe that unemployment will reach 2m by the end of the year.

But how bad could the situation get, and if there really are going to be 2m people unemployed in 2009, where will the axe fall?

John Philpott, chief economist at the Chartered Institute of Personnel and Development, thinks the starkest predictions may well prove to be accurate, and believes the economy will experience many job cuts throughout the autumn and winter.

“Our view is that many businesses have been waiting to see what might happen to the economy,” he said. “But now they know that things are getting more uncertain, they’ll begin to put those job-cut plans into action.”

His concerns are shared by Hetal Mehta, senior economic adviser to the Ernst & Young Item club of independent forecasters. “Our forecast in the summer was already one of the most pessimistic, but we’ll be looking to downgrade it even further for our October analysis,” she said.

“It’s very difficult to see a light at the end of the tunnel at this stage.”

Further evidence of the rising threat of redundancy is the increase in the number of companies seeking legal advice on making job cuts.

Allianz insurance group’s Law-phone helpline reported a 40% rise in the number of calls concerning redundancy in August.

Allianz’s business-development manager, David Vine, said: “It’s becoming much more of a concern. We’re also seeing more individuals wanting advice because they’re under consultation, which suggests that for many the process has begun.”

We’ve all seen the footage of finance workers leaving their offices with boxed-up belongings, and job cuts in areas linked to the slowing housing market have been widely reported, but who will be next?

“Different sectors are at different stages,” said Vine. “Transport has been hit by fuel increases and competition from hauliers abroad, so they and the finance and construction industries are further along than others. Retailers and small businesses seem to be next in line.”

John Philpot agreed. “For the next six to eight months inflation will stay quite high, people are not going to have much spare income, the housing market’s weak and there’s the possibility of redundancy.”

He said many small businesses that had been created on the back of the consumer boom would also struggle. “Companies that were making money from the lifestyle trade by catering to niche markets may find customers are less willing to spend on luxuries,” he said.

In food manufacturing the problem has been compounded by the soaring cost of ingredients and rising energy prices.

“You definitely get the sense that everyone’s budgeting more tightly,” Jean Rocket said. “The whole situation makes us feel powerless. Lots of people are asking themselves whether they should go for another job now and lose their redundancy or just stay put and hope for the best.”

The lesson of the Lehman collapse is surely to prepare for the worst, but recognising the signs that your employer is in trouble can be hard in such chaotic times.

“If it’s being handled correctly, a redundancy announcement will probably be kept very quiet until it is official,” said Vine. “Or, in some cases, management may not even know that they’ll end up having to make cuts until it’s too late.”

But career-change expert John Lees, author of the best-selling How to Get A Job You Love, said there were ways to stay informed. “If you think your organisation might be in trouble, talk to mentors and make your own judgment about how secure your job seems.

“The best thing to do is think positively about what you can do to secure your position. Try to get involved with the projects that matter most to the organisation rather than keeping your head down and hoping to survive.

“If you decide to leave, find an organisation that’s countercultural – ‘green’ buildings are a great example of that. The construction industry looks troubled but specialised knowledge of eco-construction is in demand. Don’t assume that you have to get out of a whole sector; even when the economy is in difficulties there are great job opportunities to be found and some organisations will still flourish in the most challenging of times,” said Lees.

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