The number of people out of work went up by 21,000 to 1.69 million between December and February, but the unemployment rate was unchanged at 5.5%, according to the Office for National Statistics (ONS).

The increase comes after four consecutive falls in the unemployment rate, although the number of people claiming benefits fell by 9,200 to 910,800, more than was expected.

An observer of the UK economy said: “The economy we have now is based on a high-employment situation where many of the lower paid jobs are undertaken by unskilled immigrant labour.

“If for whatever reason the economy becomes squeezed, and unemployment begins to rise significantly, then the first people in the firing line are those people. This would not be good news for anyone, as relations are already pretty strained in areas where local people perceive, rightly or wrongly, that they have been overwhelmed by recent arrivals.”

Average earnings rose by 4.8%, which is above the Government’s target for wage inflation, although the ONS said the rise was mainly driven by bonuses.