UK unemployment is likely to rise above 3m during the recession, according to David Blanchflower, the Bank of England’s labour market expert.

His comments followed the US Federal Reserve’s announcement to slash interest rates to 0.25%, the lowest in its 232-year history.

Blanchflower makes the warning in an article for the Royal Economic Society’s January newsletter, which was obtained by the Guardian newspaper.

Blanchflower had already warned that the jobless count will top 2m by Christmas and in the newsletter he adds: “I expect unemployment to continue to rise through 2009 and into 2010, probably to over three million.”