UK unemployment rate leaps to 4.2% amid fears of job cuts

Pay growth is stronger than expected, underlining dilemma over when to cut interest rates

• Rising unemployment points to worrying signs for UK economy

The number of people out of work rose by more than expected in February, raising concerns that employers are beginning to lay off staff in response to high interest rates.

The Office for National Statistics said the unemployment rate increased to 4.2% in February from 3.9%, well above the 4% expected by City economists.