Fall in unemployment just 'a blip' experts warn
The number of people out of work fell by 26,000 to 2.45 million in the three months to May, according to the Office for National Statistics (ONS).
The official unemployment rate was 7.7%, down from 7.8% in the previous quarter.
However, experts say this may just be a blip, with statistics for June painting a bleaker picture.
The number of people seeking Jobseeker's Allowance rose by 24,500 in June reaching 1.52 million - the biggest increase in two years.
While the number of long-term unemployed fell by 37,000, there was a rise of 11,000 in the number of people out of work for less than a year.
Brendan Barber, TUC general secretary, says the increase in those seeking benefits is a worrying sign for the future.
"International figures show that unemployment has risen 22,000 in the last month, and there has been a big jump in the ratio of unemployed people to job vacancies, from a national average of five people chasing each job to 5.4.
"Employment rates are falling around the UK and there are parts of London and Scotland where around 30 dole claimants are chasing every vacancy - and in Haringey there are 39 people after every available job," he warns.
Liam Byrne MP, Labour's shadow work and pensions secretary, echoes these concerns.
"The number of people on the dole is up by the highest level for two years. And this is now helping to push up the benefits bill by over £12 billion - that's £500 for every household in the country.
"The Tories are creating a vicious circle in our economy because they are cutting too far and too fast - hitting families and costing jobs. More people out of work and on benefits makes it harder to get the deficit down," he adds.
Around 24,000 jobs were lost in the public sector in the second quarter this year, but 104,000 positions were created by the private sector.