Unemployment hit 1.97 million in the final quarter of last year, putting it at its highest level since 1997 according to figures from the Office for National Statistics.

In January of this year, the number of people getting Jobseeker’s Allowance reached 1.23 million, an increase of nearly 74 thousand people.

This news comes as the Bank of England warns that the UK is headed for a “deep recession.”

What Analysts Have To Say…

Analysts believe that unemployment could reach 2 million in the first quarter of this year, which would be its highest rate since 1997, and many fear the situation could get worse as the economy sinks deeper into recession.

Senior Economist at the Institute for Public Policy Research, Tony Dolphin said: “Unfortunately it seems inevitable that unemployment will exceed 3 million during 2009″.

Head of Consultancy with Employment Law Advisory Services has also said: “From early in December, the number of firms seeking our help in making redundancies simply exploded.

“Things will certainly get worse before they get better. We would expect to see another significant increase in the number of people out of work in the figures published next month, as many more firms were forced to cut staff early in the New Year.”

Who Is Affected Most?

It seems that the worst hit at the moment are young people between the age of 18 and 24, with their unemployment rate currently standing at 11.8%.

The amount of people receiving Jobseeker’s Allowance has now rose for 12 consecutive months and is currently at its highest level since the summer of 1999.

British Chambers of Commerce, David Kern, said: “Unemployment continues to rise in the face of a worsening recession.

“We know businesses do not want to lose key staff, but they are struggling with cash-flow.”

He also said that freezing national minimum wage, forgetting plans to increase National Insurance, cutting business rates etc would help companies keep their employees.

What’s Being Done To Resolve The Problem?

Gordon Brown is meeting with business leaders to discuss what can be done to help.

Expected at Downing Street are executives from companies such as Royal Mail, Whitbread, Centrica, National Express, Travelodge and Sainsbury’s for the first National Employment Partnership meeting.

These companies, along with places like the NHS and local authority leaders, will agree to advertise non-specialist jobs vacancies through Jobcentre Plus, and will also start offering apprenticeships.

A Local Employment Partnership Scheme has also been launched.

“The LGA has committed to working with local authorities to increase the number of council apprenticeships by 7,500 to ensure that people are given practical skills that will stand them in good stead for years to come,” said the chairman of the Local Government Association.

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