Employment rate 'built on rotten foundations'

The Office for National Statistics showed an employment rate of 71 per cent, the highest since 1971.

But the TUC said that since the start of the recession in 2008 the small rise in employment levels has been bolstered by a 9 per cent rise in the number of self-employed workers.

Over the same period, the number of employees has actually fallen by 1 per cent.

The TUC said: "Rather than running their own businesses, many people could be undertaking false self-employment, doing the same work as contracted employees but on poorer terms and conditions."

General secretary Frances O'Grady said: "More than one in three new jobs created since 2010 have been self-employed roles. It would be naive to think that these are all budding entrepreneurs."

Unemployment fell 37,000 in the latest quarter to 2.49 million, the lowest since spring 2011, but since then there have been thousands of job losses on the high street as Jessops, Comet and HMV collapsed.

There was a 26,000 increase in the number of women out of work for up to six months, at 571,000, and the number of 16 to 24-year-olds out of work increased by 1,000 to 957,000 - the first rise since last summer.

Shadow work and pensions secretary Liam Byrne said the figures "show no roaring recovery, they show very shaky foundations."

Scotland recorded a fall of 14,000 to 207,000.

STUC general secretary Grahame Smith said: "For the second month in a row, the reported fall in unemployment has been exceeded by the fall in employment and economic activity.

"Quite simply it is no cause for celebration if people are leaving the labour force altogether rather than looking actively for work."