PM and Miliband clash over economy

David Cameron and Ed Miliband have clashed over the economy amid renewed fears over the eurozone crisis, job losses and stalling growth.

The Prime Minister admitted that new figures showing unemployment had surged by 80,000 were "disappointing", and said he was doing "everything I can" to get people back into work.

However, he insisted the Government would not rethink its tough deficit reduction plans, warning that could leave the country in the same peril as Greece.

Labour leader Mr Miliband accused the premier of "spin" and said the private sector was not filling the gap left by coalition cuts. He added: "What young people and their families are asking is, 'Where are the jobs?'."

The bruising exchanges at Prime Minister's Questions in the Commons came after Nick Clegg warned of a "stark" and worsening reality facing UK plc. In a speech, the Deputy Prime Minister pledged to push through major infrastructure projects in a bid to stimulate growth.

The bleak outlook was reinforced when the Office for National Statistics announced that the jobless total had risen by 80,000 to 2.51 million between May and July. It was the largest quarterly increase since the three months to August 2009.

Meanwhile, Germany and France are set to hold crunch talks with Athens amid burgeoning fears that Greece will default on debts despite bailout efforts. Banking stocks have been badly hit by speculation over the extent of their exposure to the problems.

Mr Cameron told MPs: "These unemployment figures are disappointing figures, I don't want to hide from that. Every lost job is a tragedy for that family and I want to do everything that I can, and this Government will do everything it can, to help those people back into work.

"That's why we have 360,000 apprenticeships starting this year, that's why we have 10,000 extra university places and that's why, in the Work Programme, we've got the biggest back to work, welfare to work programme this country has seen since the 1930s."

But he added: "It is right that we get on top of our debts and our deficits. Today of all days shows the danger of getting into a position other European countries are in, where their whole credibility is being questioned."