The number of people out of work in the UK has risen to its highest level in 14 years, official figures have shown.
Unemployment increased by 210,000 to 2.47m in the three months to July, taking the jobless rate to 7.9%, the Office for National Statistics said.
Claims for unemployment benefit in August grew by 24,400 from July to 1.61m, the highest since May 1997.
And one in five people aged between 16 and 24 is now looking for work, the highest on record, the data showed.
The number of jobless in this age group rose from 928,000 to 947,000 - edging closer to the landmark of one million and adding to fears of a new "lost generation" of young people.
Work and Pensions Secretary, Yvette Cooper, said the government was targeting investment to help young people find jobs.
"Young people are always more heavily affected by recession because, it's the easiest thing for employers to do, to put back recruitment for a year," she told BBC radio.
"That's why you've got to help young people get that first step on the ladder and that's why a lot of our extra investment is all in getting those young people into those first jobs, that first bit of training or work experience, to get them started."
Shadow work and pensions secretary Theresa May said that the levels of youth unemployment were "disturbing", and that there was an urgent need to "tackle this culture of worklessness".
There have been signs that the UK economy is beginning to pick up, but jobless data tends to lag behind other measures.
The level of unemployment is now at its highest since May 1995.
Jim Knight on unemployment figures
Employment minister Jim Knight said that an OECD Employment Outlook - which recognised UK government efforts to help the unemployed - suggested the UK had lower than average rates of unemployment than the G7 and the EU.
"However, we know things will still be tough for some time and unemployment is likely to keep increasing, even once the economy starts growing again - that's why it's critical that we continue investing in people's future and don't just abandon them."
Average earnings, including bonuses, increased by 1.7% in the three months to July, down from the previous month.
Earlier this week, the governor of the Bank of England, Mervyn King, said there were signs that the UK economy was growing again.
But he added that the "strength and sustainability" of the recovery were still "highly uncertain", saying the state of the banking system, levels of debt, and the global economy were all drags on growth.
More workers, particularly young workers, are paying a devastating price for the bankers' recession and there is some way to go before unemployment stops rising
Unemployment is still likely to reach three million in 2010, and could go higher, said economist Howard Archer of IHS Global Insight.
"Unemployment is a lagging indicator and the sharp overall economic contraction suffered between the second quarter of 2008 and the second quarter of 2009 will continue to weigh down on the labour market for an extended period," he said.
Government spending to stimulate the economy boosted employment in the public sector by 13,000 in the three months to June, the figures showed.
This contrasted with a 230,000 fall in private sector workers over the same period, the ONS said.
However there are fears that future cuts in spending aimed at tackling the huge budget deficit will lead to job losses in the public sector.
"More workers, particularly young workers, are paying a devastating price for the bankers' recession and there is some way to go before unemployment stops rising," said Paul Kenny, general secretary of the GMB union.
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