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Struggling businesses are making plans to cut workers’ pay as Britain slides into its deepest recession since the Second World War.

Unemployment is now rising at a faster rate than in the early phases of the Nineties recession, official figures out yesterday confirmed.

The number of people out of work and claiming benefits leapt by another 77,900 last month, on the heels of a revised 83,100 jump in November.

The news comes before confirmation expected tomorrow that the country has entered the sharpest economic slump for 30 years.

The ever-bleaker conditions in the UK jobs market were highlighted by the latest figures from the official Labour Force Survey, ministers’ preferred unemployment gauge, which climbed to within a fraction of 2 million, hitting 1.92 million in November. In reality, there is little doubt that more than 2 million Britons are now out of work.

Hundreds of thousands more across Britain are expected to lose their livelihoods this year as the recession cuts deeper into the economy.

Economists now predict that unemployment will soar to 3.25 million by early 2010, according to a new Reuters poll of the City.

The Bank of England reported that even among those who keep their jobs, many will face the grim prospect of pay freezes and actual wage cuts.

Scattered examples of businesses seeking to cut or renegotiate pay for existing staff have already emerged as the downturn has gathered pace, but the disclosure yesterday from the Bank’s agents around the country suggests that the trend is gathering pace.

Among the harshest examples of new terms for existing staff came in December at the Herald and Times newspaper group in Glasgow, which made all its journalists redundant and asked them to reapply for their jobs on less generous terms in a forced restructuring.

JCB, the construction equipment group, asked its workers in November to accept a £50-a-week pay cut.

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