The rate of unemployment in the UK fell slightly to 4.9 per cent from December 2020 to February 2021, some 0.9 percentage points higher than the same time last year.
Economists had predicted that the unemployment rate would edge up to 5.1 per cent as Britain spent the winter months in lockdown.
“The latest figures suggest that the jobs market has been broadly stable in recent months after the major shock of last spring,” the Office for National Statistics said.
The number of employees on company payrolls fell by 56,000 between February and March, reversing a recent improvement.
That pushed up the total number of jobs lost since the onset of the pandemic to 813,000, the ONS said.
Britain’s economy shrank by almost ten per cent in 2020 following a series of Covid restrictions.
However, the UK is in the process of lifting its third lockdown while other European countries tighten their rules.
Finance minister Rishi Sunak extended furlough support in March until the end of September.
The scheme has eased Britain’s jobless rate, which is likely to be far higher when it ends.
In April last year, the Office for Budget Responsibility said unemployment could hit ten per cent.
Sunak hopes that by the time his furlough scheme expires, the economy will be largely free of Covid restrictions amid the fast rollout of vaccines.
Jon Hudson, fund manager at Premier Miton UK, said: “At 4.9 per cent, the unemployment rate has decreased on a quarterly basis for the first time since the pandemic broke, despite the UK being in national lockdown throughout the period.
“It highlights the success of the government’s furlough scheme and suggests the economy is well placed to bounce back once restrictions are lifted.”