Unemployment has risen by 28,000 in the three months to January, hitting 2.67m, the highest rate since 1995, official figures showed on Wednesday morning.
There were 29.12m people in employment, a rise of 9,000.
Figures from the Office for National Statistics also showed an increase in the number of people claiming Jobseeker's Allowance for the 12th month in a row. The number of claimants rose by 7,200 in February to 1.6m - the highest figure since the end of 2009.
There was a 37,000 fall in public sector employment, compared to a rise of employment in private firms of 45,000.
The number of people working part time rose 110,000 compared to the previous quarter and is now at its highest since records began, at 1.3m.
The number of young people out of work increased by 16,000 to 1.04m, and the number of unemployed woman rose by 22,000 to 1.13m.
Employment minister Chris Grayling said there were "signs of encouragement" in the figures.
"There are signs of stabilisation. On youth employment, although the headline figure – which includes students – is up, the actual number of young unemployed people, genuinely unemployed people, has stabilised" he told the BBC.
Labour’s Shadow Work and Pensions Secretary Liam Byrne said the job crisis showed "no signs of letting up."
"The surge in women's unemployment is reaching shocking levels but instead of helping more families into work, next month's cuts to tax credits are set to make thousands better off if they quit their jobs and start claiming out of work benefits."
Andrew Sissons, researcher at The Work Foundation, said the fall in full time work was "particularly worrying". "There are nearly 1.4 million people in part-time work who cannot find a full-time job, and this figure is rising rapidly. This suggests that companies are still nervous about taking on full-time staff, and leaves many more people looking for extra work."
The figures come as the TUC said the government was the most female unfriendly yet, with general secretary Brendan Barber saying: "Over a million women are now without work, with female unemployment rising by nearly a quarter in the North East over the last year."
Unison general secretary Dave Prentis said Wednesday morning's figures showed women were "hardest hit" by job losses.
Martina Milburn, chief executive, youth charity The Prince’s Trust said:
“British young people are facing yet more crushing news today, as youth unemployment sky-rockets. Thousands believe they have no future. We think they are wrong.
“Today we are celebrating young people who have escaped the bleak realities of unemployment at our Prince’s Trust & L’Oreal Paris awards. They are living proof that if charities, government and employers work together, it is possible to help young people into jobs.”
Howard Archer, Chief UK and European Economist at IHS Global Insight, said the rate of youth unemployment should increase pressure on the Chancellor to come up with more measures to help young people get a job".
"The very serious concern is that many of these youths will be out of work for an extended period given the persistently weak economy and muted growth outlook. This is fuelling talk of a lost generation of workers and it puts pressure on the Chancellor to come up with more measures to help young people to get a job."
On Tuesday Ed Balls said David Cameron should ask US president Barack Obama for tips on the economy during his visit to America, saying: “While Britain’s economy has stalled and unemployment has reached a 17 year high, the US economy is strengthening and the jobless rate has come down to a three-year low.
“The US government’s more balanced and steady approach to deficit reduction up to now means they have more than recovered all the output lost in the global recession, while in Britain we are still almost four per cent below our pre-crisis peak."