Unemployment in Britain has jumped to 2.57 million people from June to August, the highest since 1994 according to data released by the Office for National Statistics on Wednesday, dealing a heavy blow to the country's recovery hopes.
Britain's unemployment rate meanwhile shot up to 8.1 per cent during the quarter, the highest level for 15 years, the Office for National Statistics (ONS) said in a statement.
"The unemployment rate for the three months to August 2011 was 8.1 per cent of the economically active population...The last time the unemployment rate was higher was in the three months to July 1996," the ONS said.
"The total number of unemployed people increased by 114,000 over the quarter...to reach 2.57 million. The number of unemployed people has not been higher since the three months to October 1994," the ONS added.
Wednesday's data comes less than a week after the Bank of England injected £75 billion (86 billion euros, $115 billion) of new money into Britain's stalled economy in a bid to boost growth.
BoE governor Mervyn King has said that Britain is facing possibly its most serious ever financial crisis.
Britain escaped from a deep recession in the third quarter of 2009 but its recovery has been severely constrained by collapsing consumer confidence, painful state austerity cuts and the Eurozone debt crisis.
Although Britain is not a member of the Eurozone, the bloc is the country's main trading market.
"Today's UK labour data is very weak," said James Knightley, an analyst at ING Bank. "The weakness is no real surprise given the wave of fiscal austerity is resulting in significant public sector job losses.
"Meanwhile worries about the sovereign debt crisis in Europe and slowing global growth will have kept private sector firms cautious and reluctant to hire workers.
"Hiring intentions surveys remain in positive territory but we are cautious on jobs given the global growth story is unlikely to rebound sharply in the near-term.
"BoE stimulus will help but we also need some resolution to the sovereign debt story and action from other central banks to stimulate the recovery," Knightley added.