Unemployment figures show Britain's 16-24 year olds continue to suffer in the tough job market.

Overall unemployment figures rose to just over 2.5 million in the final quarter of last year. The number of women claiming Jobseekers' Allowance at its highest since 1996 and long term out-of-work figures have also risen.

Despite the bleak picture painted by the results the Government remains optimistic about the recovery, pointing out that the number of vacancies across the country is also at a record high.

Work and Pensions Minister Chris Grayling said: "Things do now seem to be stabilising. The rise in the number of vacancies is particularly encouraging. The challenge for us now is to push ahead with our welfare reforms as quickly as possible so we start to move more people off benefits to take advantage of those vacancies."

Recent cuts in the public sector are being cited as a reason for the increase. Critics of the Government's austerity measures highlight the fact that public sector redundancies are currently continuing and the full effect on unemployment figures cannot be measured yet.

Paul Kenny, General Secretary of the GMB union, points out: "So far GMB has logged over 162,000 direct job losses in the pipeline in 290 councils with more to come."

Industry experts have echoed the argument that there is an imbalance in suitable job opportunities in the private sector.

John Salt, director of total jobs.com said the sector was "unable or unwilling to create the number of permanent jobs to offset the cuts in local authorities" adding, "I think we'll continue to see rises in unemployment throughout the year."

However it is the number of young people affected by unemployment that is causing the most concern. Analysts argue that if the Government does not address the issue properly the damage to the UK economy could be felt for many years to come.

Martina Milburn of youth charity Princes Trust added "A new report published by The Prince's Trust and Citi Foundation shows that disadvantaged young people helped into work or self-employment could boost the UK economy by millions. If we fail to help them into work, it will have a devastating impact on young people, their families and the economy."