The number of people out of work in the UK rose by 137,000 to 1.86 million in the three months to October - the highest level since 1997.
This took the unemployment rate up to 6% from 5.8% previously, the Office for National Statistics said
People claiming Jobseeker's Allowance in November rose 75,700 to 1.07 million - the largest rise since March 1991.
Several companies have announced big job cuts as the economic downturn begins to hit hard.
Compare maps to see how unemployment has changed by region
"These people are not scroungers. They are blameless victims of a worldwide economic downturn and deserve to be treated as such "
"It's obviously very, very weak. I think what's interesting is the scale of job losses this early in the cycle," said George Buckley, an economist at Deutsche Bank.
"Unemployment is normally a lagging indicator so to see so many job losses this early in the cycle is extremely worrying."
Pound rattled
The pound hit another record low against the euro after the unemployment data underscored just how weak the UK economy was.
The number of people claiming unemployment benefit rose for a tenth consecutive month and climbed above the one million mark for the first time in eight years.
HSBC, Leyland and Spanish bank Santander, which runs Abbey, Alliance & Leicester and parts of Bradford & Bingley, are among the many firms to have announced job cuts in recent months.
On Wednesday, rail and bus firm National Express said it would cut up to 750 jobs as it acted to save costs.
"The latest unemployment figures are bleak and herald a return to the dark days of mass joblessness we hoped had gone forever, " said Dr John Philpott, chief economist at the Chartered Institute of Personnel and Development
Blameless victims
The trades union umbrella body the TUC has predicted two million people will be out of work by Christmas, and says half a million people will be facing their second Christmas out of work.
It is calling for Jobseeker's Allowance to be raised from £60.50 to £75 a week.
"These people are not scroungers. They are blameless victims of a worldwide economic downturn and deserve to be treated as such," said TUC general secretary Brendan Barber.
"As well as more support to get back into work, unemployed people need more immediate financial support to help them cope with life on the dole."
Managers are expected to be hit hard by job cuts, with the Management Consultancies Association forecasting up to 360,000 will lose their jobs by 2010.
The Prince's Trust has also warned that young people have so far borne the brunt of job losses.
It said that two out of five people who became unemployed in the past three months were under the age of 25.
The government is to unveil a new training scheme for the unemployed.
It has allocated £158m to help those who have been made redundant develop new skills.
The fund is supposed to make it easier for workers to get advice on training and support employers who want to improve the skills of their staff.
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