UK unemployment rose to 2.26m in the three months to April, the highest figure in twelve years, according to figures released by the Office for National Statistics.

The jobless rate increased to 7.2%, the highest level since July 1997 and the total number of people claiming unemployment benefit rose by 39,000 in May.

Despite the rise in unemployment and the jobless rate the overall figures are not as bad as many economists had predicted.

"Once again, unemployment figures show a smaller than expected rise in the jobless total, which is good news," said Philip Shaw, chief economist at Investec.