UK unemployment for December to February came in hot and rose to 4.2%, overshooting market consensus of a flat 4%.
It was the highest rate since August 2023, driven by a decrease in part-time employees.
The number of full-time workers increased during the quarter, as did the number of people in employment with second jobs, accounting for 3.6% of all workers.
Commentators suggested it was a sign that the UK economy is cooling and therefore the first interest rate cut can get serious consideration.
Danni Hewson, AJ Bell's head of financial analysis, said: “For months we’ve been watching cracks begin to form in the UK jobs market as the post-pandemic boom faded and the cost-of-living crisis forced businesses to retrench.
“Vacancy numbers have fallen again and again, and though they’re still above where they were before Covid lockdowns the fact that unemployment has also been rising suggests a huge disconnect between the jobs available and workers free to fill them.
The skills gap is nothing new and there never has been a quick fix, but with economic inactivity also surging over 22% it is a problem that’s becoming increasingly important.
“How can the UK economy grow if its businesses are held back because they can’t find the workers they need to expand and fulfil their potential?
"Without that growth, the current economic torpor will become endemic and the growing pressure on the public purse will leave few options other than tax hikes to balance the books."
On the prospect of rate cuts, Hewson said "There’s certainly a growing hope that a June cut might once again be back on the table, even if the US Fed is a step or two behind".