The number of people looking for work has reached 1.71 million – the highest for seven years.

Figures released today cover the three months to September and reveal that the number of unemployed is up 27,000 on the quarter and by 263,000 on the year.

The number of people claiming Jobseeker’s Allowance – the claimant count – stands at 961,300, up by 1,200 on the quarter and 70,100 on the year.

Meanwhile, 28.99 million were in work during the quarter, fractionally down on last quarter’s record-breaking 29 million but still one of the highest figures on record, reflecting a rising population and immigration.

The number of unfilled vacancies over the quarter was 602,600, slightly down on the previous quarter.

Separate figures from the Department for Work and Pensions show falls in the numbers claiming lone parent and incapacity benefits.

The number claiming incapacity benefits has fallen below 2.7 million for the first time in six years.

Jim Murphy, minister for employment and welfare reform, said: “Employment is up by nearly 200,000 on the year, and with a strong economy and over 600,000 vacancies there is room for more.

“That is why we have set our long-term aim of reaching 80 per cent employment, by getting more older people and lone parents into work and reducing the number of people on incapacity benefits.

“The latest figures show we are already making progress on all three. Employment is up 175,000 this year for people aged over 50, the number on incapacity benefits is at its lowest since 2000, and the number on lone parent benefits is down by nearly a quarter since 1997.”