UK unemployment rose by 114,000 between June and August to 2.57 million, a 17-year high, according to official figures.
The Office for National Statistics (ONS) said the unemployment rate also increased to 8.1%.
The unemployment total for 16-24 year olds hit a record high of 991,000 in the quarter, a jobless rate of 21.3%.
The number of people out of work and claiming benefits rose 17,500 to 1.6 million in September.
Other figures showed a record cut in the number of part-time workers, down by 175,000, and there was also a record reduction of 74,000 in the number of over-65s in employment.
The Employment Secretary, Chris Grayling, said that what the UK was now seeing was "the impact of the international financial crisis".
He said although the UK was not in the euro, it was "not immune" to the problems currently being experienced in the eurozone and in countries such as Greece.
There have been criticisms of the government's deficit reduction programmes, with some analysts saying it was hampering economic growth.
The shadow work and pensions secretary, Liam Byrne, said the news marked "a day of judgment for the government".
"Today's figures are the clearest proof yet that the government's decision to cut too far and too fast is hurting and just not working. Unemployment is soaring, and more young people are out of work than ever before."
