After many years of being overlooked in favour of more glamorous statistics such as GDP or inflation, unemployment is back in the headlines.

A fortnight ago 20,000 jobs were lost at well-known companies such as BT, Virgin Media, GlaxoSmithKline and Yell Group. During the past seven days a further 25,000 job losses have been announced at other household names.

It means that the “headline” unemployment figure – which includes all people out of work and not just those claiming jobseeker’s allowance – is likely to rise from 1.82 million at the end of September to more than two million by the end of the year.

There is plenty more to come, particularly in the financial services sector. Royal Bank of Scotland has already announced that 3,000 investment banking jobs are to be cut worldwide, many of them in the City, while JP Morgan – one of the few US banks to survive the meltdown relatively intact – is also thought to be preparing big staff reductions. Again, hundreds of jobs are expected to go in the City, where the bank employs about 5,000 people.

Worst of all, Britain looks like being the second-biggest single casualty at the US bank Citigroup, which is cutting 52,000 jobs worldwide.

It is chilling to realise that these job losses are only the ones that we know about, because they have all taken place at publicly listed companies that are obliged to inform the stock market of material changes in their prospects – including job losses.

Beneath the radar, though, a further three million or so Britons are employed in companies owned by the private equity sector. They, too, will be quietly cutting jobs as, indeed, will the private equity industry itself. One of its best-known operators, Guy Hands, of Terra Firma, admitted this week that the number of people working in private equity or in sectors depending upon it – which is nearly 25,000 – would fall substantially this year.

Equally hidden from public view are jobs being lost at small and medium-sized companies – often only two or three at a time, but they add up.

Job losses have a critical effect on the retail sector – which itself employs almost 2.5 million Britons. John Lewis, a high street bellwether, admitted yesterday that it had suffered a 14 per cent drop in weekly sales.

Accordingly, one of the biggest challenges facing Alistair Darling in his PreBudget Report is how to create an environment in which employers feel comfortable about keeping staff.

Miles Templeman, director-general of the Institute of Directors, argues that the key is to help businesses stay afloat.

The IoD proposes three measures. The first is to ensure that small businesses have access to affordable credit by encouraging banks to increase lending and to pass on the recent interest rate cuts. Second, it wants large companies and local government to follow Whitehall’s promise to pay all suppliers within ten days, bolstering the cash-flow of small companies. Thirdly, it wants a moratorium on regulation.

Underpinning all this is the IoD’s main demand – a temporary fiscal stimulus of £20 billion in the form of a 3p reduction in the basic rate of income tax and a 4p cut in the main rate of corporation tax.

The British Chambers of Commerce proposes the reintroduction of empty property tax relief, scrapping plans for a rise in fuel duty and the reversal of rules penalising the involvement in family businesses of spouses. It wants an extension of the small firms loan guarantee scheme – seen as one of the likeliest announcements on Monday. David Frost, its director-general, says that cutting national insurance contribution rates “would be the most effective way of helping businesses to shore up their finances and hold on to staff”.

The Chancellor is far more likely to concentrate on initiatives such as rises in tax credits for poorer families, child benefits and winter fuel payments. But the Bank of England has indicated that future interest rate policy will be strongly influenced by the fiscal measures he announces. The larger the headline figure, the smaller further interest-rate reductions are likely to be, which is why the Chancellor must aim his bullets at the right targets.

The worst possible outcome for jobs would be a huge package of measures, aimed at the wrong targets, putting further interest-rate cuts in jeopardy.

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