UK unemployment rate rises for the first time in two years - but wages increase too

The Office for National Statistics said the unemployment rate for March to May was 5.6%

The Office for National Statistics said the unemployment rate for March to May was 5.6% (Getty)

The UK's unemployment rate has increased for the first time in two years, according to the latest jobs report, but a rise in wages may have helped soften the blow.

The Office for National Statistics said the unemployment rate for March to May was 5.6%, lower than the 6.5% recorded in the same period a year earlier, but a slight increase on the 5.5% seen in the three months to April

Meanwhile, the number of people in work fell by 67,000 as fewer people took up part-time roles.

In contrast, wages including bonuses were up 3.2% in three months to May. Excluding bonuses, the growth was 2.8% - the largest in more than six years.

Ian Stewart, chief economist at Deloitte, said the "underlying story is good for UK consumers".

"The labour market recovery is shifting, with the pace of job creation cooling and earnings heading up... Private sector jobs and full time work are expanding.

"The frenetic pace of job growth has slowed, but the good news is that wages and productivity should pick up from here."

Martin Beck, a senior economic advisor at Ernst and Young, said that the figures showed a normalisation of the job market in the UK.

"Having become accustomed to persistent declines in the unemployment rate, the labour market data for the three months to May came as something of a shock. The number of people out of work increased by 15,000 leading to the first quarterly rise in unemployment since March 2013," Beck said.

"But the number of full-time employees rose, indicating a further shift towards normality in the labour market," he added.

But the British Chambers of Commerce said the "disappointing" job figures highlighted a need for more action to spur Britain's recovery, though there was no cause for alarm.

"This setback is a reminder that our recovery is still fragile and that further measures are needed to nurture economic growth, in particular by encouraging businesses to invest and export," said David Kern, the BCC's chief economist.