Britain's jobless rate jumped to 8.3% in the three months to September, hitting a 15-year high, while youth unemployment surged past one million for the first time, official data showed today.
"The unemployment rate was 8.3% of the economically active population, up 0.4 (percentage points) on the quarter," the Office for National Statistics said in a statement.
The ONS added that the number of unemployed aged 18-24 jumped 67,000 to a record 1.02 million.
Euro zone crisis threat to UK growth
The Bank of England warned today that the euro zone debt crisis is the "single biggest risk" to the UK recovery as it forecast a dramatically increased threat of a double-dip recession next year.
The bank's quarterly inflation report revealed a greater chance of the economy contracting in the first three quarters of 2012, compared with its August forecasts, as euro zone and banking concerns and squeezed household budgets continue to weigh on growth.
The Bank of England slashed its central - or most likely - growth estimate to no more than 1% in both 2011 and 2012 from previous forecasts of around 1.5% and 2.2% respectively.
The worsened prospects for the UK economy mean inflation is likely to fall far quicker than previously estimated, hitting the Government's 2% target in the second half of next year before falling to as low as around 1.3% in 2013.
The Bank of England cited weak global growth - in particular in the euro zone - as one of the key developments which influenced its decision to boost QE by a further £75 billion sterling last month, increasing its total asset purchases to £275 billion.
"The prospects for the UK economy have worsened. Global demand slowed. And the solvency of the euro-area governments intensified, increasing strains in banking and some sovereign funding markets," today's report said.
"Implementation of a credible and effective policy response in the euro area would help to reduce uncertainty and so support UK growth, but its absence poses the single biggest risk to domestic recovery," it added.
"There will be weakness in the economy over the next few quarters and although no one can know what the outcome will be thereafter we expect the economy to pick up,' commented the Governor of the Bank of England Mervyn King.
"We have seen slow but positive growth over the past year. We think that once the adjustment in the euro zone area gets through these difficulties, it will pick up again," he added.
Last week, the Bank of England held its key interest rate at a record low 0.5%.
