There was an unexpected, sharp drop in the number of Britons claiming unemployment benefit in February.
The Office for National Statistics says there were 10,200 fewer people claiming – the biggest monthly decline since June.
However the number of people without a job, calculated using the wider International Labour Organisation measure, rose to 2.529 million in the three months to the end of January.
The last time the total was that high was when Britain was emerging from recession in late 1994.
The UK jobless rate rose to to eight percent.
Unemployment among those looking for work between the ages of 18 and 24 rose to 18.3 percent of the workforce, its highest since records began in 1992.
Things were better for those in work. Wages picked up slightly faster than expected, with average wage growth in the three months to January rising to 2.3 percent from 1.8 percent, its highest since May. Economists had forecast a 2.2 percent rise.
Britain’s economy shrank by 0.6 percent in the three months to December, partly due to poor weather but also raising concerns about an underlying slowdown as sharp government spending cuts are brought in.
“With the government’s austerity plan likely to result in further cuts in public sector jobs … total unemployment is likely to increase to 2.65 million over the next 12-15 months before it starts declining,” said David Kern, chief economist for the British Chambers of Commerce.