Unemployment in the UK increased by 114,000 for the three months to August to 2.57m people - the highest number since 1994, according to the Office for National Statistics (ONS).
Its latest figures showed that the unemployment rate for the country is now 8.1%, up 0.4% on the previous quarter and the highest rate since the three months to July 1996.
Young people continue to be particularly badly hit, with unemployment among 16- to 24-year-olds hitting a record high of 991,000, up 74,000.
The jobless rate among young people is now more than one in five, rising 1.6% to 21.3%.
Part-time workers also saw record cuts, with numbers down 175,000 over the quarter to 7.78m.
In total, there are 29.1m people aged over 16 employed in the UK, down 178,000 on the previous quarter - the largest quarterly fall since the three months to July 2009.
Meanwhile, the number of economically inactive people in the UK rose by 26,000 to 9.35m, while 1.6m claimed Jobseeker's Allowance in September, up 17,500 on the previous month.
Brian Johnson, insolvency expert at chartered accountants HW Fisher & Company, said: "These unemployment figures are bad, but with the economy so weak and more public sector cuts planned, the omens are worse.
"It is no exaggeration to say the country could be facing another winter of discontent.
"The government had hoped that an export-led economic recovery and a resilient financial sector would cushion the blow of public sector job cuts. Neither has materialised."
He added: "With such a bleak jobs market, the coalition will face extreme hostility to further job cuts and we could see the government forced to do battle with the trade unions."
Two global vehicles
'Further plug advice gap'
Must appoint separate CEOs and boards
Advisers do come out well
Will report to Mark Till