More Britons are expected to have joined the dole queue in September than in any month since December 1992 as the economic slowdown deals the job market an increasingly heavy blow.
Analysts expect official figures on Wednesday to show the claimant count for unemployment rose by 35,000 last month — the eighth consecutive monthly rise and the biggest jump since the end of Britain's last recession.
Even that could be the tip of the iceberg. The spate of bank mergers and collapses in recent weeks are likely to feed into sharp rises in the coming months.
The Centre for Economics and Business Research believes 62,000 financial jobs will be lost by the end of next year, wiping out the hiring gains of the past decade.
"In a word, the jobs report is going to be bleak," said Alan Clarke, UK economist at BNP Paribas. "What's more, unemployment is a lagging indicator so the worst is yet to come."
Job cuts are by no means confined to sectors related to financial services and the housing market. Confectionery giant Cadbury Plc <CBRY.L> has just announced 580 job losses and ITV <ITV.L>, Britain's largest commercial broadcaster, is cutting around 1,000 jobs.
Manufacturers are also struggling, despite the export benefits of a weaker pound. A survey of purchasing managers showed manufacturing companies shed workers last month at the fastest pace since records began 17 years ago.
MORE PAIN TO COME
A sustained rise in the number of people out of work could sour public opinion of Prime Minister Gordon Brown, whose dismal ratings have improved in recent days following his deft handling of the financial crisis.
The government's preferred measure of joblessness, ILO unemployment, is also forecast to see a hefty rise. This measure rose by 81,000 in the three months to July to reach a total of 1.72 million.
Bank of England policymaker David Blanchflower has warned that two million people on this measure could be out of work by Christmas — a claim that an increasing number of economists now believe.
Alongside the employment data, the official statistics are expected to show subdued wage growth as the labour market weakens — allaying policymakers' concerns that high inflation may seep into wage demands.
That could bolster expectations for further reductions in interest rates. British interest rates were cut to 4.5 percent last week and money markets show investors are betting rates will fall to 3 percent by this time next year.
"We believe that wage growth will remain muted as faster unemployment undermines workers' bargaining power," said Howard Archer at Global Insight. "Companies are under enormous pressure to contain their wage costs given generally deteriorating sales prospects."
