Official figures show that the number of people claiming jobless benefits in Britain recorded its biggest jump in more than two years in July as employment growth slowed.
The number of people claiming jobless benefit rose by 37,100 last month, the Office for National Statistics said. This was the largest jump since May 2009, and was also well above economists' forecasts for a rise of 20,000.
The country's labour market has been surprisingly robust throughout the financial crisis and employment has risen despite a sluggish economic recovery.
But recent surveys have indicated that firms are scaling back hiring plans, raising doubts about the ability of private companies to make up for public sector jobs losses caused by the British government's spending cuts.
The number of people without a job on the wider ILO measure rose by 38,000 in the three months to June to 2.494 million and the jobless rate unexpectedly rose to 7.9%, compared with forecasts for an unchanged 7.7%.
Employment rose by only 25,000 in the three months to June, the slowest increase since the three months to December 2010, and the number of vacancies fell to the lowest level in nearly two years.
Average weekly earnings growth including bonuses rose at an annual rate of 2.6% in the three months to June compared to last year. Excluding bonuses, however, pay increased by only 2.2%. The wage increase remains well below inflation, which is running above 4%.
