Unemployment is still on course to soar above three million despite better-than-expected jobless figures, it was warned yesterday.Official data showed unemployment rising to 2.

Unemployment is still on course to soar above three million despite better-than-expected jobless figures, it was warned yesterday.

Official data showed unemployment rising to 2.47 million in the three months to August, an increase of 88,000 on the quarter to May, a far smaller rise than in recent periods.

And the figures showed recent steep rises in unemployment in the east of England have begun to level off, at 200,000 in the June to August period, up 13,000 on the previous three months.

But worse lies ahead for the job market with public sector cuts and rising youth unemployment looming, experts warned.

Vicky Redwood, of Capital Economics, said: “We think the fiscal squeeze could require around 750,000 job losses in the public sector - meaning that unemployment should easily surpass three million.”

And school leavers and newly-qualified students are also set to enter the worst jobs market in a generation, according to IHS Global Insight's Howard Archer. He said: “Many of the school leavers who cannot get a job will still be unemployed next year when the next batch of school leavers emerge.”

But smaller-than-expected rises in unemployment were also seen by some business leaders as a positive signal that the economy could be starting to improve.

Caroline Williams, chief executive of Norfolk Chamber of Commerce, said: “National figures show that unemployment has risen at a much slower pace than expected in the three months to August, confirming our assessment that the recession is ending. However, there is no room for complacency and a sustainable recovery is not guaranteed.

“Although confidence is strengthening, businesses are still facing serious pressures, particularly small and medium-sized firms. Lending is still too weak, and many are struggling to retain their skills base.”

Separate claimant count figures also released yesterday, which are not adjusted to take into account of seasonal trends, showed a slight fall in the number of people claiming Jobseekers' Allowance in Norfolk at 17,399 in September, down nearly 400 in a month, but up about 6,600 on September 2008.

Figures for Norwich were down 110 in a month at 4,275, in Breckland down 145 at 2,422, Broadland down 86 at 1,506, Yarmouth stable at 3,046, King's Lynn and West Norfolk down 67 at 2,773 and North Norfolk down 61 at 1,640. The claimant count for South Norfolk was up 19 at 1,737.

In Suffolk, the figures were down 214 at 13,563, in Cambridgeshire the claimant count was down 125 at 9,845 and Hertfordshire down 225 at 19,727.