Commentators predicted unemployment would break the two million mark this morning but the Office for National Staistics (ONS) reported the figure was 1,971,000.
The number of unemployed claiming job seekers allowance currently stands at 1,233,000 - 438,100 higher than in January 2008.
The unemployment rate is now 6.3% (up 0.4% points on the last quarter) with a rise of 146,000.
John Atkinson, associate director at the Institute for Employment Studies, said: "In the face of this significantly worsening problem, two key policy changes are needed. First, additional resources are urgently needed to help job centres try to keep up with the influx of new jobseekers in order to maintain some short-term movement of the register.
"Second, labour-intensive public works, in construction and infrastructure, should be promoted to reduce long-term and entrenched unemployment and to maintain key employability skills within the workforce."
