Young people are the biggest losers of the recession as they are finding it hard to compete in a tough labour market, it has been claimed.

Thomas Usher, research fellow at the Institute for Employment Studies (IES), said those with low skills and a lack of experience have found it hardest to compete.

He continued: "This includes many who were already unemployed, who find themselves stuck. We can see this clearly in the rapidly rising long-term unemployment."

Blue-collar workers are the worst affected by this recession, although professionals are showing signs of becoming more reliant on jobseekers’ allowance.

According to the latest unemployment figures from the Office for National Statistics on July 15th, the unemployment rate was 7.6 per cent for the three months to May, up 0.9 per cent over the previous quarter and up 2.4 per cent over the year.

The number of unemployed people increased by 281,000 over the quarter and by 753,000 over the year, to reach 2.38 million, marking the largest quarterly increase in the number of unemployed people since comparable records began in 1971.