The number of Britons claiming jobless benefits saw its biggest jump in over two years in July and employment growth slowed, data showed today, adding to pressure on the government to boost the struggling economy.

The number of people claiming jobless benefit rose by 37,100 last month, the Office for National Statistics said, well above economists' forecast of a rise by 20,000 and the largest jump since May 2009.

The labour market has been surprisingly robust throughout the financial crisis and employment has risen despite a sluggish economic recovery.

However, surveys have indicated that firms are scaling back hiring plans, raising doubts about the ability of private companies to make up for public sector jobs losses caused by the government's spending cuts.

Rising unemployment is likely to further dent shaky consumer morale, already hit by high inflation, low wage rises and recent riots in major British cities.

The number of people without a job on the wider ILO measure rose by 38,000 in the three months to June to 2.494 million and the jobless rate unexpectedly rose to 7.9 per cent, compared with forecasts for an unchanged reading of 7.7 per cent.

Employment rose by only 25,000 in the three months to June, the slowest increase since the three months to December 2010 and the number of vacancies fell to the lowest level in nearly two years.

Average weekly earnings growth including bonuses rose 2.6 per cent in the three months to June compared to last year, a faster rate than the 2.3 per cent analysts had forecast.

Excluding bonuses, however, pay only increased by 2.2 per cent.

The wage increase remains well below inflation, which is running above 4 per cent, providing little relief for households' squeezed budgets.

Reuters