UNEMPLOYMENT in London has shot up by 58,000 in the past year.

The number out of work in the capital has reached 298,000, an unemployment rate of 7.4 per cent.

The figure is significantly above the national average of six per cent in England and 5.8 per cent across the United Kingdom as a whole.

There are now 1.8 million people out of work in the UK - up by 182,000 compared to last year.

This is the highest figure since 1997. But economists predict it will rise much higher.

Graeme Leach, chief economist at the Institute of Directors, said: "For the next 12 to 18 months, the only way for unemployment is up.

"We think it will reach 2.5 million by this time next year, peaking at around 2.8 million in 2010."

And in its quarterly inflation report, the Bank of England warned the UK has probably entered a recession, with the economy expected to shrink by two per cent over the next 12 months.

Employment Minister Tony McNulty (Lab Harrow East), the Minister for London, said: "They are bad figures, there's no way of putting a shine on that at all."

Speaking to the BBC, he said: "Central to the employment figures will be getting liquidity back into the whole system. We've also got a range of interventions, from training...to offering more help and support.

"Despite high levels of employment, these are disappointing figures.

"We also need to understand that there are still some dynamics in the labour market. There are still some 580,000 plus vacancies in the economy. It's our job to make sure people's skills are matched to these vacancies.

"My role is to ensure that people get back to work as quickly as possible, with the support of the government."

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