Unemployment increased to 2.5 million after a jump of 49,000 in the quarter to the end of November.

However, today's figures were not enough to take the jobless rate to 8%.

According to the Institute for Public Policy Research, the figures represent a "real test" of the Government's economic strategy.

The IPPR believes the risk of an employment double dip remains "very real" in the face of cuts in the public sector.