Unemployment hit 2.261 million

The jobless rate rose to 7.2%, the highest since July 1997, but still less than expected.

The number of people claiming unemployment benefit rose by 39,000 in May, less than the 60,000 which had been forecast by analysts.

The claimant count rate rose to 4.8%, the highest since November 1997.

Average earnings rose 0.8%, more than expected, in the three months to April, the ONS said.

This reflects the timing of bonus payments in the financial services sector, it said.

The number of people in work fell by 271,000 over the three months to 29.11 million, the biggest quarterly drop since comparable records began in 1971.

"It's better than expected. It is is probably still too soon to conclude that we have reached any turning point, but it is moderately encouraging," said Ross Walker, the UK economist at RBS Financial Markets.

Philip Shaw, the chief economist at Investec, said: "Once again unemployment figures show a smaller-than-expected rise in the jobless total which is good news."