Britain's unemployment rate rose for the first time since the coronavirus lockdown began in March but official data published on Tuesday also showed a less severe fall in employment than feared.
The unemployment rate increased to 4.1% in the three months to July from 3.9% in the April-June period, the Office for National Statistics said.
Economists polled by Reuters had expected the unemployment rate to rise to 4.1%.
However, the fall in the number of people in employment was a relatively small 12,000 compared with a median forecast for a fall of 125,000 in the Reuters poll.
Figures from Britain's tax office showed the number of staff on company payrolls fell by 695,000 between March and August, versus a sharply revised 659,000 in the March-July period.
Economists expect more jobs to be lost as the government's huge job retention subsidies are wound down before expiring at the end of October.
"This is a difficult time for many as the pandemic continues to have a profound impact on people's jobs and livelihoods," finance minister Rishi Sunak said in a statement.
"That's why protecting jobs and helping people back into work continues to be my number one priority."
The number of job vacancies rose to 434,000 in the three months to August, almost 30% higher than in the April-to-June period but almost half their level before the pandemic.
