Joblessness rose by 15,000 to 2.52 million in the three months to the end of March, an unemployment rate of 7.8 per cent.
The number of people in work also fell by 43,000 to 29.7 million, the biggest decline since autumn 2011. But claims for jobseeker’s allowance dropped by 7,300 to 1.52 million over a one-month period from March to April.
The latest figures from the Office for National Statistics (ONS) seem at odds with data suggesting that economic recovery may be stronger than previously assumed.
While it is now thought that Britain may have escaped a double-dip recession, Martin Beck, UK economist at Capital Economics, said: “Following recent positive news on the economy, today’s UK labour market data provides something of a reality check.”
Mr Beck said the “one piece of good news” was the fall in jobseeker’s allowance claimants, but he warned that with further job cuts in the public and private sectors, “it may not be long before even this narrower measure of unemployment starts to rise too”.
The ONS figures also show that annual wage growth for the three-month period was 0.4 per cent, a fall of 0.4 per cent on the previous quarter and well behind inflation.
Pay fell in March by 0.4 per cent, the first time this has happened since March 2009.
While the number of those out of work for longer than a year increased by 23,000 to 902,000, the number of unemployed 16 to 24-year-olds fell by 17,000 to 958,000.
Although unemployment has risen for the third consecutive quarter, it is still 92,000 lower than a year ago.
Employment Minister Mark Hoban said: “Whilst there has been a disappointing increase in the headline rate of unemployment, we shouldn’t forget the progress we are making.
“We are not complacent. To win the global race we need to do all that we can to help people achieve their aspiration to look after themselves and their families.”
But Liam Byrne, shadow work and pensions secretary, said: “We now have definitive proof the government has simply failed to get Britain back to work … despite a jobs crisis, the government did literally nothing in the Queen’s speech to help.”