Unemployment has increased by 27,000 despite another fall in the number of people claiming jobless benefits, new figures showed today.

In the North-East, the jobless figure is 64,000, an increase of 2,000.

The rise, the biggest for more than a year, took the total to 1.44 million, the highest since last Christmas.

The unemployment rate, covering the latest quarter to June, increased by 0.1% to 4.8%.

The number of economically inactive people, including those who are sick or disabled, have taken early retirement or simply stopped looking for work, increased by 89,000 to 7.85 million - the highest figure since records began in 1984.

The number of inactive men increased over the three months by 51,000 to 3.1 million, also a record high, while among women the figure rose by 38,000 to 4.75 million.

But there was some brighter news for the Government with other figures showing that the claimant count fell in July by 13,700 to 835,200 - the lowest level since 1975 and the 14th consecutive monthly cut.

The number of people claiming Job Seeker's Allowance is now 100,000 lower than a year ago.

Today's data from the Office for National Statistics also showed that the number of people out of work for longer than a year has fallen 18,000 to 290,000, the joint lowest on record.

There were 658,300 job vacancies in the UK economy last month, up by 74,100 from a year ago and one of the best on record.

Meanwhile average earnings increased by 4.4% in the year to June, unchanged from the previous month.

Wage growth in private firms fell back by 0.1% to 4.3% while in the public sector it rose by 0.1% to 4.4%.

Jane Kennedy, Minister for Work, said: ''Despite a mixed picture this month, unemployment has fallen over the year to levels not seen since the mid 1970s and vacancies are high and rising.

''Since 1997 the number of people in work is up by 1.9 million and all parts of the country have benefited.

''Not only that but a strong economy and successful labour market policies such as the New Deal for Lone Parents have made a real difference for groups who previously lacked the help they needed to prosper in the labour market.''