Recovery will be 'protracted'
Updated on 12 August 2009
Mervyn King poured cold water on the chancellor's prediction the economy would bounce back saying any recovery would be "slow and protracted".
There are now nearly two and half million people out of work, an increase of 220,000 in the three months to June and the highest figure since 1995.
It means the unemployment rate stands at 7.8 per cent.
Total unemployment leaps to 2.44 million
In the three months to June the number of workers facing unemployment increased by 220,000, said the Office for National Statistics.
Click here to see a map showing the jobless figures for your region.
Unemployment in the UK is now at its highest level since the summer of 1995.
The number of people claiming jobseeker's allowance in July also increased by 24,900 to 1.58 million although average earnings increased by 2.5 per cent in the year to June, up by 0.2 per cent on the previous month.
The annoucement marked the 17th month in a row where the so-called claimant count has increased in the UK.
Jobless figures in your area
Click on the map below to see details of unemployment levels in your region.
Click here to see the regional figures for unemployment from January to March 2009.
In May unemployment rose by the biggest quarterly increase since records began in 1971, taking the jobless rate to 7.6 per cent.
But jobless benefit claimant numbers rose by just 23,800 in June, the smallest increase in a year, taking the jobless rate on this measure to an 11-year high of 4.8 per cent and leading some analysts to question the figures.
The government has now launched an inquiry, ordered by work and pensions secretary Yvette Cooper, which will study why so many are not claiming benefit.
A spokesman for the Department of Work and Pensions said: "It's fairly open, the key issue is establishing why there is a difference in the trends of the key figures."
There is no time limit for the inquiry.
The spokesman said some possible causes of the discrepancy between the two sets of data are that some people who have recently lost their jobs are relying on their partner's income, their own savings or redundancy payments.
On Channel 4 News, George Buckley, chief UK economist at Deutsche Bank and Steven Bell, chief economist at the London-based hedge fund GLC, debated the prospects for the UK.
Mr Buckley said: "It will be a gloomy and fragile year and we are looking at GDP or the economy growing at a much slower pace in the future than we have been used to in the past.
"So I wouldn't be surprised if after a short period of perhaps a little bit better growth and the recession being over… that next year we could have what we call a double dip where economic growth isn't as strong as even the end of this year."
But Mr Bell said: "I think we are going to get a much stronger recovery than the Bank of England expects.
"We are not in recession any more The best indicators suggest we are actually , even more remarkably growing out of this faster than just about any other western country and I think unemployment will be falling by Christmas."
