Unemployment rose by 137,000 to 1.86 million between August and October, official figures show.

The number of people claiming Jobseeker's Allowance last month increased by 75,700 to 1.07 million, said the Office for National Statistics.

Unions are urging ministers to move away from the "anti-scrounger" rhetoric and increase statutory redundancy pay from £330 to £500 a week.

The tax-free limit on redundancy pay should be increased from £30,000 to £50,000, and the jobseeker's allowance (JSA) needs to be raised from £60.50 a week to £75, the TUC argues.

TUC general secretary Brendan Barber said: "These figures show the awful human cost of the financial crash feeding through into the real economy.

"The Government's number one priority must now be on getting these people back to work and ensuring they do not face financial devastation while on the dole.

"If ever there was a sign that we need a fundamentally different economic approach in the UK, this is it."

Paul Kenny, general secretary of the GMB union, said: "These figures reflect how many families face bleak prospects during Christmas and the New Year. Things will get a lot worse before they get better.

"As well as taking measures to restart their economies, Governments in the UK and elsewhere need to take steps to deal once and for all with the elements in the financial sector that visited this recession upon us.

"We can no longer tolerate a provisional wing of capitalism that was allowed to cock a snook at the standards of transparency, disclosure and accountability required of the official wing of the financial sector.

"Trading by the provisions wing in financial markets should be outlawed forthwith."

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