The number of people claiming unemployment benefit has soared past one million for the first time in eight years, after rising at the fastest rate since 1991.

The number on jobseeker's allowance rose by 75,700 in November - the fastest monthly rise since 1991 and 42 per cent higher than the 44,000 increase in claimants economists had forecast for November.

In October, the number rose by 36,500, less than half of the surprise 75,700 rise announced today. Total claimants in the UK has now hit 1.07 million and is the highest number since January 2001.

Today's figures also show that the total number of people out of work in the UK rose by 137,000 to 1.864 million for the three months to the end of October, the highest rate since June 1999.

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It means that 6 per cent of the British population is now unemployed, a 0.4 per cent rise on the previous three months and up 0.7 per cent on the same period in 2007.

The figures, from the Office for National Statistics, measure the number of people who claimed unemployment benefit during November.

They also record the total number of unemployed people in the UK for the three months from August to October.

Sterling hit a record low against the euro shortly after the figures were released at 91.03p, while sterling also hit a session low against the dollar, dropping to $1.5493.

The pound was also depressed by minutes from the Bank of England, which showed the Monetary Policy Committee had considered a more drastic rate cut in November than the 1 per cent reduction. The minutes showed the committee's decision to take the rates to 2 per cent was unanimous.

The FTSE also fell this morning, shedding 64.78 points to stand at 4,244.3.

Howard Archer, chief UK and European economist at IHS Global Insight, said: "This is just a horrific set of data on the jobs front."

"There can be absolutely no doubt that unemployment is headed sharply higher in 2009 given that the economy looks set to contract by at least 2.0 per cent next year. Reports of companies laying off workers are becoming more and more prevalent, while an increasing number of companies are folding."

Today's figures reinforce the gloom surrounding British employment as the economy heads towards recession.

Nigel Meager, director of the Institute for Employment Studies, said: “The hike in unemployment announced today is worryingly close to the kinds of increases experienced in recessions of the early 80s and 90s. The UK has entered the current downturn in better shape than it was in those days, with lower unemployment, a more flexible labour market and a mobile pool of migrant labour. It is a measure of the severity of the current downturn that these mitigating factors are no longer sufficient to keep the lid on increases in unemployment."

Last month, unemployment hit an 11-year high of 1.82 million, and the CBI, the employer's organisation, subsequently forecast that the toll could hit 2.9 million by 2009.

Redundancies have continued to mount over the past four weeks. Last Friday alone, 3,000 people were left jobless after companies including Woolworths and Santander, the Spanish owner of Abbey, announced cuts.

James Purnell, the Work and Pensions Secretary, last week unveiled new proposals, which will require virtually everyone who is claiming benefits to prepare for work or actively seek a job. The proposals, which go further than anything previously outlined by Labour, drew anger from the unions.

This morning, Dr Archer predicted that the claimant count could reach 2 million and total unemployment could hit 3 million by the beginning of 2010.

More immediately, he said there was further pressure on the Bank for more cuts in interest rates.

"The now sharply deteriorating labour market intensifies pressure on the Bank of England to slash interest rates again in January, while ongoing wage moderation reinforces belief that inflation is headed sharply down and the Bank of England has ample scope to relax monetary policy further."

Unemployment in the US hit a 26-year high on Friday as 573,000 Americans lost their jobs last week - 58,000 more than during the previous week.

The figures, from the Department of Labor, showed that 6.7 per cent of the American workforce is now out of a job.

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