Unemployment rose to 2.67m in the three months to December 2011 with the joblessness rate now at a 16 year high, according to official figures released on Wednesday.
The rise of 48,000 was lower than the predicted jump of 80,000.
Welfare minister Lord Freud said the the government were not "complacent" and would continue to try and get people into work: "The latest figures show some encouraging signs of stability despite the challenging economic climate.
"With more people in employment and a rise in vacancies, it is clear the private sector is still creating jobs.
"However, we are not complacent. With more people in the labour market we know that competition for those jobs is tough and we will continue to make it our priority to find people work."
Office for National Statistics figures show the numbers claiming Jobseekers' Allowance (JSA) rose by 6,900 to 1.6m last month, while the number of women claiming JSA is at an 18 year high - up by 1,500 to 531,700.
The number of people working part time is at record levels - up by 83,000 in the three months to December 2011 to 1.35m.
Youth unemployment rose by 22,000 to 1.04m, up 0.3%. The figure includes 307,000 people in education who are looking for jobs.
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