Britain's unemployment is expected to climb to a 12-year high of more than 2.27 million on the release of new figures, economists have forecast. The number of people claiming unemployment benefits, which jumped by 57,000 in April, is tipped to have surged by up to 63,000 in May as companies continued to cut jobs.

The overall unemployment rate is expected to rise from 7.1 per cent to 7.3 per cent - the highest level since February 1997.

The CBI expects unemployment to peak at more than three million next year, although it revised down its previous forecast showing the number of jobless rising to 3.25million. It said that it remained concerned about unemployment, particularly the rise in the number of young people out of work. About 676,000 18- to 24-year-olds were unemployed between January and March this year, nearly a third more than in the same period last year, the most recent official figures show.

The TUC expects unemployment to continue rising well into next year, peaking in the autumn. Brendan Barber, its general secretary, said: “Some say that we have a recovery, but even if this is not a false dawn, as others fear, it will be years before the thousands of people who have lost their jobs or who will lose them in months to come will see anything to celebrate.”

Dismal figures from the eurozone showed that a record 1.2 million people in the 16 nations using the single currency lost their jobs in the first three months of the year.

Employment fell by 0.8 per cent compared with the previous quarter and 1.2 per cent year-on-year, also a record drop since records began in 1995. The figures were dragged down by heavy job losses in Greece, Slovakia and, in particular, Spain, with a 3.1 per cent decline, according to Eurostat, the European Union statistics office. In Germany, the eurozone's biggest economy, employment fell by 0.3 per cent.

Separate figures, published this month, showed that unemployment in the eurozone rose by 396,000 in April, the thirteenth consecutive monthly rise, taking the rate up to a near-ten-year high of 9.2 per cent.

IMF concern

The worst of the global economic crisis may be yet to come, Dominique Strauss-Kahn, the International Monetary Fund (IMF) chief, said yesterday, but there was more upbeat news from the IMF on the outlook for the United States as it revised up its economic forecasts. It said that the huge government stimulus would help to ease the recession this year and encourage modest growth in 2010.

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