The number of Britons claiming jobless benefits rose for the third successive month in April, official data showed today, suggesting a slowing economy is starting to hit the job market.
Figures from the Office for National Statistics showed the claimant count rose 7,200 in April to 806,300. That was the biggest increase since April 2006 and the first time it has risen in three consective months for almost two years.
The internationally-recognised International Labour Organisation (ILO) unemployment level also rose, up 14,000 to 1.612 million in the three months to March, the first rise in more than a year.
"The main message is we are now seeing a softening in labour market conditions that we haven't seen until now," said Alan Clarke, an economist at BNP Paribas.
The figures also showed signs that higher living costs may be feeding through to wages - highlighting the dilemma facing Bank of England policymakers as they grapple with weaker growth and rising inflation.
Average earnings in the three months to March rose 4 per cent, above forecasts and the highest since last November. In March alone, wages rose 4.7 per cent, the highest single monthly rise since January 2007.
Excluding bonuses, earnings growth was more benign, however, and analysts suggested the Bank of England would not be unduly worried by the figures.
"Given that the labour market is now loosening we think that wage growth will remain well-contained in the coming months," said Nick Kounis at Fortis. "As such, we do not see the labour market as an important risk to inflation at this juncture."
However, the ONS data showed employment is still runnning at record levels according to the Labour Force Survey. Employment on this measure rose 117,000 to 29.5 million in the three months to March.
That left 74.9 per cent of working age Britons in work, the highest in more than three years.