THE North-East could face the gloomy prospect of as many as one ten people being out of work, experts warned last night.

The warning came as official data showed overall unemployment rising to 2.47 million in the three months to August, an increase of 88,000 on the quarter to May.

In the North-East, unemployment was up 3,000 to 118,000, a jobless rate of 9.5 per cent.

In contrast in Yorkshire and Humberside, 5,000 fewer people were registered unemployed, the figure standing at 226,000, or a jobless rate of 8.6 per cent.

The jobless rate of 9.5 per cent in the North-East is the highest since July to September 1999 when it hit 9.8 per cent. The last time it reached ten per cent was between February and April 1997.

During the last recession in the early Nineties, the jobless rate peaked in the North-East at 13.5 per cent in the quarter between June and August 1993.

Last night, Tony Cleaver, a senior teaching fellow in economics at Durham University, warned that a ten per cent jobless rate in the North-East – which would mean one in ten of the workforce being out of work – was “entirely within the realms of possibility”.

Mr Cleaver said he feared what economists have called a “double dip” and also said unemployment was generally one of the last areas to pick up in a recession.

He said: “If there is an eventual recovery it may not be for a while. Unemployment may stabilise in the short term and then in six months time go up again.

“The fear is of a double dip, where the recession starts with a bang before things eventually start to look better with people seeing green shoots of recovery, but then the economy goes down again after that.

“Some indicators may already have started to improve, but unemployment is generally the last to show an improvement.

“People’s household debts in this country are still fairly high which means they aren’t spending and that has an impact on jobs.”

Mr Cleaver added: “If there is a change of Government and they start cutting spending and increasing taxes then things are not going to get any better. I would be quite happy for the Government to continue spending its way out of the recession.”