Britain’s jobless figure rose above the two million mark for the first time in 12 years, while the number of people signing on for benefit soared by a record 138,000 last month, grim new figures showed today.

The Government was hit by a raft of gloomy news, with redundancies reaching a record high, jobs and vacancies falling and more people claiming Jobseeker’s Allowance.

The total number of people out of work jumped by 165,000 in the three months to January to 2.03 million, the worst figure since Labour came to power in the summer of 1997.

The figures were released as an overhaul of the UK’s financial regulation in the wake of the banking crisis was due to be unveiled.

Lord Turner, chairman of the Financial Services Authority, was considering an outright ban on 100 per cent mortgages, restricting the amount of cash would-be homeowners can be lent for a mortgage to three times a borrower’s salary and a clampdown on high risk trading by banks.

Today’s unemployment figures from the Office of National Statistics show the number of job vacancies fell by 74,000 to 482,000 in the three months to February, the lowest total since records began in 2001.

The unemployment rate is now 6.5 per cent, an increase of 1.3 per cent over the year, the highest figure since the end of 1997.

The figures were mirrored in Shropshire and Mid Wales, where the number of people claiming the Jobseeker’s Allowance increased from 9,957 to 11,515, a rise of 1,558.

Shropshire saw a rise in the jobless figure of 741 up to 4,880. In Telford & Wrekin the figure was up from 3,964 to 4,529 and in Powys it rose by 252 to 2,106.

The biggest rise in Shropshire was in Shrewsbury and Atcham where the figure rose by 294 from 1,347 to 1,641. In Oswestry the number of people claiming the benefit went up to 871 from 750, and in Bridgnorth, it rose from 656 to 823.

North Shropshire saw a rise in unemployment of 95 to 1,005 and in South Shropshire the figure was up 64 to 540.

By Business Editor Amy Bould