[geoff01]

• Number out of work reaches 2.261 million
• Unemployment rate reaches 7.2%
• Fears rise over effect on youth

Unemployment has soared to its highest level in more than 12 years as UK companies continue to fold or slash headcount in the face of Britain's deepest recession in almost 30 years.

The total number of people out of work rose by 232,000 in the three months to April, to 2.261 million, data from the Office of National Statistics showed. This pushed the unemployment rate, as measured by the labour force survey, to 7.2% – the highest since July 1997.

The ONS said another 39,300 people joined the claimant count in May, taking the number of people claiming benefit to 1.554 million. This was less than forecast by City economists, who had expected a rise of 60,000.

The figures add to growing concern that many of the 600,000 young people who leave school, college or university this summer will not find a job – nearly half of UK companies say they are not planning to hire new starters. A group called Youth Fight for Jobs will hold a protest today outside the Department for Business, Innovation and Skills to demand more government support.

"We have to fight to prevent an entire generation being written off," said Sean Figg, national organiser for Youth Fight for Jobs.

"Unless the issue of youth unemployment is tackled seriously we are storing up a raft of social problems for decades to come," added Figg, citing the warning from David Blanchflower, the dovish former MPC member, that being unemployed in youth creates "permanent scars".

Unemployment typically lags behind other economic indicators, and is expected to keep rising even if the economy returns to growth this year. The prospect of 3 million unemployed has dampened hopes of a swift economic recovery. The chief executives of Home Retail, Halfords, New Look and Kingfisher have all cited it as a threat.

Guardian.co.uk