UNEMPLOYMENT in the UK has fallen to a record low - but the North-East has seen 7,000 more people out of work in the past three months.

Despite most regions in the country seeing a drop in unemployment of up to 14,000, the figures show the North-East has been haemorrhaging jobs in the past quarter.

And across the UK, manufacturing jobs continued to be lost, hitting a record low - down 87,000 in the past quarter compared with a year ago, to 3.36 million.

Figures showed that the rate of decline is slowing, although thousands of jobs continue to be lost across the country, especially in textiles and clothing and electrical and optical equipment.

Unions and business leaders expressed concerns about the regional figures last night.

George Cowcher, chief executive of the North-East Chamber of Commerce, said: "It is worrying that at a time of record low unemployment nationally, the number of people out of work in the North-East has risen substantially.

"We must identify why this region is bucking the UK trend and concentrate on continuing to create a prosperous economy that gives the maximum opportunity to unemployed people."

Alan Hall, regional director of the Engineering Employers' Federation, said: "I am very surprised about the increase in unemployment.

"I would want to question those figures because they don't corrolate with what I have seen. I am not aware of any major haemorrhaging of jobs to see such a giant leap in unemployment."

But Gerry Hunter, of trade union Amicus, said he was not surprised at the jump in the numbers of unemployed.

"South Durham and Darlington have been hit by redundancies in the last few months," he said.

"Manufacturing is under general pressure at the moment. There has never been as many pressures on it and I am very concerned about the growth in unemployment."

Across the country, eight million are now economically inactive, including people who have taken early retirement, long-term sick, students and those looking after a family, after a rise of 91,000 over the three months to August.

The total is the highest since records began in 1984 and led to a fresh attack from the Conservatives and claims that Labour was a long way short of achieving full employment. A Department for Work and Pensions spokesman said the North-East figures in the last quarter were a blip - and that unemployment was at the same levels as last year's figures.