Job prospects for tens of thousands of students about to leave school and university appeared even bleaker yesterday after youth unemployment surged to its highest for 15 years.

One third of pupils aged 16 and 17 who have already left school were out of work in the three months to April, official figures showed, and one in six of those aged 18 to 24 was unemployed, the most since July 1994.

These figures are set to balloon further over the summer as students leaving school and university struggle to find work. Companies have cut back on recruiting junior staff, preferring to keep their existing workers who are prepared to take pay cuts or work fewer hours. This has already forced tens of thousands of young people on to the dole queue.

The number of young people claiming benefits has soared by 80 per cent to 456,400 in the year to May. Economists have warned that businesses are unlikely to start recruiting again in earnest for at least a year.

Those who struggle to clinch a first job can often find it increasingly difficult to find work, experts say, raising the risk that they will remain on jobless benefits for longer. The number of 18 to 24-year-olds signing on for more than six months but less than a year jumped by 112 per cent in the year to May, the figures showed. Young men have been worst affected, with one in five of those aged between 18 and 24 out of work.

Martina Milburn, chief executive of the Prince’s Trust, the youth charity, said: “Youth unemployment now costs the state £23 million per week in jobseeker’s allowance. But the impact on unemployed young people — who all too often fact a downward spiral towards a loss of self-confidence and even crime — is immeasurable.”

The total number unemployed hit a 12-year high of 2.26 million in the three months to April.

An extra 39,300 signed up for jobseeker’s allowance last month, taking the total claimant count to 1.54 million. Although the monthly rise was more modest than it has been recently, analysts said that it did not indicate that the jobs market was heading for recovery.

“It is important not to be fooled into thinking that the labour market is going to improve any time soon. With the economy still contracting, unemployment will continue to increase into 2011 and there will be more downward pressure on earnings,” Hetal Mehta, senior economic adviser to the Ernst & Young ITEM club, said.

The number of jobs in the economy shrank at the fastest rate in the three months to April since records began nearly 40 years ago. The number of people in employment fell by 271,000 to 29.1 million, the Office for National Statistics said.

Those on the top rung of the company ladder or practising a profession have not been protected from the downturn, according to detailed figures from job centres. The number of chief executives and directors of major companies signing up for unemployment benefits trebled in May compared with the same month last year, while the number of architects signing on has risen tenfold.

Despite the fifth consecutive quarterly rise in the number of public sector jobs between February and April, the number of former civil servants on jobless benefits rose by 136 per cent.

The competition among job hunters is also much stiffer, with seven applicants chasing every job, up from two in October last year, according to figures collated by the Conservatives.

Business bodies urged the Government to take more action to try to curb the rise in inflation. “Making job cuts is the last thing that businesses want to do, and the Government must do everything it can to help firms keep people in their jobs, as well as giving advice, training and support to those who have become unemployed,” John Cridland, Deputy Director-General of the CBI said.

Most economists do not see the economic growth picking up significantly until late next year.

Who’s in the dole queue?

Number of directors and chief executives of major organisations: 1,560 in May, up from 605 in May last year.

Sales reps: 8,465, up from 3,485 last year

IT operations technicians: 12,825, up from 6,655

Painters and decorators: 20,645, up from 11,105 last year

Lawyers: 1,930, up from 400

Tax experts: 195 up from 35

Office assistants: 102,015 up from 53,535

source NOMIS

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