Looking for work? Debt collectors are in demand in the UK

An opportunity may have arisen for the estate agents and luxury car salemen put out of work by the recession.

Provident Financial, which lends to low-income households in Britain, plans to hire more debt collectors this year as an increasing number of consumers turn to the company as banks shun riskier customers.

The business may not be widely known in more affluent parts of the country, but Provident's agents already visit one in twenty British households. Customers of the doorstep lender borrow smaller amounts, on average around £400, which is paid back in weekly installments, with a sizeable "fixed charge" attached.

For every £100 borrowed, Provident's customers on average pay back £3 a week for 57 weeks. That amounts to £171 paid back on a £100 loan.

Provident aims to hire between 200 and 250 people this year, around 80 of whom will go door-to-door to retrieve outstanding debts. Collection accounts for "99pc of the man hours," according to chief executive Peter Crook.

Unlike its rival Cattles, Provident has been able to keep its level of loan arrears and impairments steady over the course of 2008, despite the worsening economy, by tightening up its lending criteria and turning away more applicants. The business has continued to grow despite this because of the increase in people approaching Provident for loans.

Banks, credit card companies and non-secured lenders have retreated from serving lower-income households since the summer of 2007, leaving an "increasingly under-served" market for Provident.

Unemployment to exceed 2m for first time under New Labour

Unemployment is expected to exceed two million for the first time since Labour came to power in 1997.

Official figures to be released on Wednesday morning will show that tens of thousands of people lost their jobs in the three months to December.

They come amid evidence that Britain's jobless total is rising twice as fast as the European average.

The unemployment total hit 1.92 million in the three months to the end of November. Since then thousands of staff have been sacked by major employers, including 27,000 at Woolworths.

A further 2,300 were made redundant by the Royal Bank of Scotland on Tuesday.

The number of people who claimed Jobseekers' Allowance in January will also be released, offering a more up-to-date insight into the damage being done to the jobs market by the recession. The total reached 1.16 million in December.

An analysis by the TUC showed that while Britain's unemployment rate - 6.1 per cent - is lower than the European average of 7.7 per cent, it is now rising twice as fast as the European average.

Between December 2007 and October 2008, Britain had the third sharpest increase in unemployment, behind Spain and Ireland, said the unions.

Over the same period, unemployment in France went up by just 0.1 per cent and fell 0.8 per cent in Germany.

In advance of the figures' release, James Purnell, the Work and Pensions Secretary, said: "We know times are tough and we will do all we can to help people who lose their jobs find another as quickly as possible to prevent the long-term unemployment which has so scarred communities in the past from taking root."

Gordon Brown is to meet business leaders shortly before the figures are announced, to discuss ways of giving more assistance to people losing their jobs.

Bank of England Governor Mervyn King says UK economy is in 'deep' recession

The Bank of England Governor Mervyn King has warned that the UK is in 'deep' recession and delivered its clearest signal that it will move beyond cutting interest rates to help revive the economy.

The risks to the economy remain "heavily weighted to the downside," the Bank of England said today in is its gloomiest assessment so far. The speed of deterioration is accelerating, the Bank said in its latest Quarterly Inflation Report, and the economy may shrink by 4pc by the middle of this year. Inflation will drop to 0.5pc at the end of next year, it added.

Governor King also gave a sharp signal that interest rates are heading below 1pc as the Bank steps up efforts to prevent what's already the deepest recession since the early 1980s turning into something worse. The news drove sterling almost two cents lower against the dollar to $1.44, and put it on the back foot against the euro.

The report provides "strong support for our view that rates are heading to zero or very close," said Jonathan Loynes, an economist at the Capital Economics.

Today's assessment comes as the barrage of bad news from most parts of the economy continues. Unemployment reached nearly two million, its highest level for almost 12 years, in January, figures earlier today showed. That comes on top of confirmation last month that the recession is officially the worse since 1980.

The Bank insisted that the weakness in sterling - its down 28pc against the dollar since the start of 2008 - will eventually help pull the economy out of recession. However, Hetha Metal, an economist at the Ernst & Young ITEM Club, doubts the pound will make a powerful impact because overseas demand for British goods will remain weak.

Governor King and the rest of the Monetary Policy Committee have so far reacted to the downturn by aggressively cutting interest rates, the speed of which increased after the collapse of Lehman Brothers in October deepened the crisis and its fall-out on the wider economy.

The Bank today also signaled it will take measures to inject more money into the economy as earlier moves to make money cheaper become redundant. These measures include buying assets such as corporate and Government bonds.

US suffers biggest job losses since 1974

The overall unemployment rate in the US, which is calculated using slightly separate figures, rose to 7.6pc, the highest in 16 years. 11.3m Americans are now out of work.

Ian Shepherdson, chief US economist at High Frequency Economics, agreed, saying: "If ever there were an economy in need of stimulus, this is it.” Mr Sheperdson called the data set "another horrific report, showing job losses across the economy."

The new figures mean that 3.6m Americans have now lost their job since the US recession began in December 2007, with a rapid acceleration in losses in the last three months.