Official figures show that the number of people out of work in the UK rose to its highest level in more than 17 years in the three months to October, although the pace of new benefit claims appears to be levelling off.
The Office for National Statistics said that the number of people out of work in the three months to October rose by 128,000 to just under 2.64 million, its highest level since 1994.
But the unemployment rate held steady at 8.3%, in contrast to economists' expectations for a rise to 8.4%.
The pace of new jobless benefit claims also appears to be slowing. The number of people signing on for unemployment benefit rose by 3,000 to 1.6 million in November - well below the 14,900 increase forecast by economists. The ONS also revised down its October increase to 2,500 from 5,300.
Separate ONS figures also out on Wednesday showed that UK public sector employment dropped to its lowest level since September 2003 in the third quarter of 2011, falling by 67,000 to 5.99 million.
For 2012, Britain's independent government forecasting unit, the Office for Budget Responsibility, predicts that unemployment will average 8.7%, and that the economy will struggle to grow more than 0.7% over the whole year.
Wage growth remains muted. Average weekly earnings growth including bonuses slowed to an annual rate of 2% in the three months to October, down from 2.3% in September, in line with forecasts.
