UK unemployment has hit its highest level for six years, figures from the Office for National Statistics show.There were 1.65 million people classed as unemployed in the three months to May, an increase of 90,000 on the previous quarter, the ONS said.

The number claiming unemployment benefit also increased, rising by 5,900 to 956,600 in June.

Analysts said the latest figures may help to ease worries of inflationary pressures in the economy.

Wage growth cools

The unemployment rate was 5.4%, the ONS said, up from 5.1% in the previous quarter.

The manufacturing sector continued to shed jobs. The ONS figures showed that there were 112,000 fewer manufacturing jobs in the March to May period than at the same point last year.

Average earnings increased by 4.1% in the three months to May. While the rate was higher than expected it was down from the previous month’s figure of 4.4%.

Pressures on prices and wages have led to speculation that UK interest rates may have to rise later this year to head off the threat of inflation.

However, analysts said this latest set of figures from the ONS made the possibility of a rate rise less likely.

“UK employment data continues to highlight the lack of inflationary pressures emanating from the labour market,” said James Knightly, an economist at ING.

Gavin Redknap, an economist at Standard Chartered, said that the Bank of England “should remain relaxed about the prospects for domestic inflation going forward”.

“We expect no move in rates in the UK this year,” he said.

The Bank of England has kept its rates unchanged at 4.5% for 11 months.