Unemployment is predicted to rise to a peak of 7.5% - or 2.6 million people - in the second quarter of 2021, according to the OBR.
Delivering his Spending Review, Chancellor Rishi Sunak said nearly £3billion would be provided to Work and Pensions Secretary Therese Coffey to deliver a new three-year "restart programme" to help more than one million people who have been unemployed for more than 12 months to find new work.
After the peak next year, however, jobless numbers are set to fall.
The Chancellor said: "Unemployment is then forecast to fall in every year, reaching 4.4% by the end of 2024."
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The most recent figures show the number of UK workers on payrolls has now fallen by 782,000 between March and October due to the impact of the coronavirus pandemic.
The Office for National Statistics (ONS) said in the three months to September 2020, the most recent figures in the report, redundancies reached a record high of 314,000 - up 181,000 on the quarter.
The overall UK unemployment rate over the same period was 4.8%, up 0.9 percentage points on the same period last year and 0.7 points on the previous quarter.
An estimated 1.62 million people were unemployed, the ONS said, 318,000 more than a year earlier and 243,000 more than the previous quarter.
However, those numbers are set to shoot up as the furlough scheme winds down.
ONS deputy national statistician for economic statistics Jonathan Athow said: "The latest monthly tax numbers show over three-quarters of a million fewer employees on the payroll in October than in March.
"Unemployment grew sharply in the three months to September, with many of those who lost their jobs earlier in the pandemic beginning to look for work again. The number of redundancies has also reached a record high.
"Vacancies continued to recover from the very low numbers seen earlier in the year. However, these figures predate the reintroduction of restrictions in many parts of the UK."