From The TimesJune 12, 2008

Fears of widespread job losses grow as unemployed figures rise sharply

City experts predict scale of cutbacks will accelerate

Thousands of people will lose their jobs over the next two years as the deepening economic downturn forces more companies to cut staff, City experts said yesterday.

After figures revealed the steepest jump in the number of people out of work for two years, economists said the scale and pace of job losses would accelerate sharply in the coming months.

The mounting toll of jobs as economic conditions worsen was highlighted by official figures showing that the number of people claiming unemployment benefits had leapt by 24,400 since February. The number of people receiving state support rose by 9,000 last month, on the heels of a 11,200 jump in April that constituted the biggest increase for two years. This pushed the total to 819,300, up from a low of 794,900 in January.

An alternative measure of unemployment, based on a monthly survey of a section of the population and preferred by ministers who regard it as a closer reflection of labour trends, also jumped. It rose by 38,000 to 1.64 million in the three months to the end of April, the sharpest rise for any three-month period since July 2006. This pushed the proportion of people out of work to 5.3 per cent, up from 5.2 per cent, the first rise since May 2006.

Unemployment rose most sharply in the West Midlands between February and April with 23,000 people losing their jobs. However, employers in the South East continued to hire workers, with employment rising by 23,000 in the three months to April, the official figures show.

In the City, economists said that the trend of rising joblessness was only just beginning. “Given that the slowdown in the economy is expected to continue, unemployment is likely to continue to rise, and at a faster rate,â€