The number of people in work fell by the largest margin in four years in August, according to the Office for National Statistics (ONS).

The employment figures dropped by 56,000 in the three months to the end of August from the previous quarter after redundancies on the high street and in the manufacturing sector.

However, wages continued to outpace the rate of inflation, with earnings excluding bonuses growing at an annual pace of 3.8 per cent.

“Employment” measures the number of people aged 16 years and over in paid work. The employment rate is the proportion of people aged between 16 and 64 years who are in paid work.

The unemployment rate unexpectedly rose to 3.9 per cent in the June-to-August period from 3.8 per cent. However, the unemployment rate is still close to its lowest level for 44 years.

“Unemployment” measures people without a job who have been actively seeking work within the past four weeks, and are available to start work within the next two weeks.

Vacancies fell for the eighth month in a row from the January peak of 861,000 to 813,000 in August.

ONS figures covering the past year were more buoyant as the employment rate rose to 75.9 per cent from 75.6 per cent. According to the ONS, much of the rise was down to women over 60 staying in the workforce following the new state retirement age.

Frances O’Grady, Trade Union Congress general secretary, said: “The threat to working families of the hardest possible Brexit has damaged economic growth and is now hitting the labour market. The government must stop playing games with people’s jobs and rule out a disastrous no-deal Brexit. And MPs must not support any deal that will hurt workers’ rights, jobs and livelihoods.”

Matthew Percival, Confederation of British Industry director, said: “The UK’s labour market remains in a good place, although there are signs that firms are becoming more cautious in hiring staff, with vacancies edging down, and pay growth potentially at its peak.

“Amid a wider slowdown of the global economy, a Brexit deal is needed for firms and government to refocus on the domestic agenda, delivering productivity-enhancing investment in R&D, infrastructure and skills.”