Spain's unemployment rate rose to a three-year high of 9.6 per cent in the first quarter of this year, according to data released on Friday. The move of 246,000 people into the unemployment category represents the third consecutive quarter in which the country's jobless rate has risen. Spain's service sector fuelled most of the losses, with 77,500 redundancies, closely followed by construction. Finance minister Pedro Solbes told a press conference that he predicted unemployment would rise to 9.8 per cent this year and ten per cent the next, before it falls again. He also expects the economy to generate 200,000 jobs in both 2008 and 2009, although unions are saying the government must shift the economy away from construction if there are to be enough jobs to go round, Reuters reported. Housing has been the major driver of Spain's economy for the last decade, but after the credit crunch hit last year the bubble has burst, causing many firms to cut back their workforces.