Britain's jobless rate now stands at 4.7%

The government's preferred ILO measurement of unemployment fell by 15,000 to 1.4 million between February and April.

However, job losses at MG Rover helped push the number of people out of work and claiming benefits up by 13,200.

Claimant count unemployment reached 855,300 in May, the fourth month in a row to have seen an increase.

This is the longest run of monthly rises since the end of 1992, when Britain was mired in an economic slump.

Britain's jobless rate now stands at 4.7%, the Office for National Statistics (ONS) said.

Factory setback

The monthly claimant count total includes more than 5,500 job losses at collapsed UK carmaker MG Rover.

The crisis at MG Rover also cost thousands of jobs at companies supplying the firm's Longbridge plant in the West Midlands.

Job losses at Rover helped push unemployment higher

The number of people working in the manufacturing sector hit a record low of 3.2 million, after falling by 79,000 in the three months to April, the ONS said

Meanwhile, average earnings increased by 4.6% in the year to April, up by 0.1% on the previous month.

Inflation risk

"While there are signs that the labour market may now be starting to soften, the evidence is far from conclusive," said Howard Archer, an economist with analysts Global Insight.

"The Bank of England will probably be reassured by these earnings figures, given that it has identified rising wages as a significant risk to the inflation outlook."

Bank of England governor Mervyn King warned earlier this week that rising labour costs could pressure inflation.

However, consumer price inflation held steady at 1.9% for the third month in a row in May, the ONS said on Tuesday.

Work and Pensions Secretary David Blunkett said that about half of the increase in May's claimant count unemployment was "due to the Rover figures coming on stream".

"But nearly 1,000 of those have now obtained a job and many more are going into training," he told Sky News.