The UK's unemployment rate has risen above expectations, though wages have increased, according to the Office for National Statistics (ONS).
The rate of unemployment rose to 4% in the three months to May, up from 3.8% in the previous three months.
Economists had predicted a reading of 3.8% for the latest quarter.
Meanwhile, average regular wages, not including bonuses, were 7.3% higher in the three months to May, the same as during the previous three months and the joint highest since records began in 2001.
Responding to Tuesday's figures, Chancellor Jeremy Hunt said: “Our jobs market is strong with unemployment low by historical standards.
“But we still have around one million job vacancies, pushing up inflation even further.
“Our labour market reforms – including expanding free childcare next year – will help to build the high-wage, high-growth, low-inflation economy we all want to see.”
ONS director of economic statistics Darren Morgan said: “Total employment grew in the latest three months while the number of people actively looking for work also increased, both driven by men rejoining the labour market.
“Pay excluding bonuses has again risen at record levels in cash terms.
“Due to high inflation, however, the real value of weekly earnings are still falling, although now at its slowest rate since the end of 2021."
Shadow work and pensions secretary, Jonathan Ashworth, said: “These figures are another dismal reflection of the Tories’ mismanagement of the economy over the last thirteen years.
“Britain is the only G7 country with a lower employment rate than before the pandemic and real wages have fallen yet again – just as more and more families feel the devastating impact of the Tory mortgage bombshell.
“Labour’s mission is to secure the highest sustained growth in the G7. We will create good jobs across every part of the country and our welfare reform and job support plan will get Britain working again.”
It comes as mortgage rates are expected to surpass the highest levels seen last autumn, during the aftermath of the mini-budget.
The typical two-year fixed-rate residential mortgage on the market reached 6.63% on Monday, Moneyfactscompare.co.uk said.
On October 20, 2022, the average two-year fixed-rate mortgage hit a peak of 6.65%, amid the market volatility which followed September’s mini-budget.
The average five-year fixed-rate homeowner mortgage also peaked at 6.51% on that date, according to the site.
Mortgage rates later settled down, but then started to rise once more amid expectations that interest rates will be higher for longer as the Bank of England tries to subdue stubbornly high inflation.
Rishi Sunak wants to halve inflation to about 5% by the end of the year, but the rate has remained at 8.7%.
The chancellor said on Monday he is prioritising tackling inflation over tax cuts, in a blow to Tory MPs clamouring for a pre-election giveaway.
In his first Mansion House speech in the role, Mr Hunt said that bringing down soaring prices “puts more money into people’s pockets than any tax cut”.
Before setting out longer-term reforms to make UK capital markets more attractive, Mr Hunt said there can be no sustainable growth without abolishing inflation.
"Tackling inflation therefore unlocks the prime minister’s other two economic priorities – growing our economy and reducing debt – but because it is a prerequisite for both, it must come first," Mr Hunt added.
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