The number of Britons claiming jobless benefits fell again last month, but the total number of people out of work began to rise, official figures have shown.

The claimant count fell by 4,500 in October from September to 940,500, cutting the jobless rate to a 27-year low of 3.1%, according to the Office for National Statistics (ONS).

The figures defied forecasts of a slight increase in the number of benefit claimants, taking the City by surprise.

But the Labour Force Survey (LFS) measure of unemployment - which includes those out of work but not claiming benefits - rose by 45,000 in the three months to September to 1.5 million, its highest level in two years.

The ONS said the latest figures, which follow a series of moderate increases earlier this year, confirm that the underlying trend in LFS unemployment has now started to rise.

"It is now trending upwards," an ONS spokesman told BBC News Online.

Growth fears

The figures suggests that the economic slowdown is finally starting to filter through to the jobs market.

Sluggish economic growth in the US and in Europe have led to the loss of thousands of jobs in the UK's export-oriented manufacturing sector in recent months.

But with buoyant consumer spending fuelling sustained growth in the larger services sector, the overall unemployment rate has held steady.

Analysts fear that a substantial rise in job losses could choke off consumer spending, putting economic growth at risk.

City job losses

Some analysts said the increase in the total jobless numbers could reflect a recent wave of lay-offs by London-based investment banks.

Sacked City workers tend not to claim unemployment benefits.

Separate ONS data showed that average wages grew at an annual rate of 3.8% during the three months to September, well below the 4.5% seen as the maximum compatible with low inflation.