The number of people claiming unemployment benefit has risen to its highest level in almost three years, according to the Office for National Statistics.

The claimant count for March was 937,000, up 12,600 on the previous month. The figure is up 106,200 from March 2005. The unemployment rate for the three months ending in February rose to 5.1%, from 5% in the previous quarter.

The number of job vacancies fell 3,300 to 937,600 over the quarter. Sue Dodds, a director with Agile Intelligence said that supply is still greater than demand in the labour market, which would have implications for recruitment agencies.

“The perception of clients is it’s a ‘soft’ labour market and they can squeeze margins and this will be tough on agencies,” said Dodd. “The Michael Pages will carry on doing as well as they are but the general recruitment firms will find that times are challenging and it will continue like that until they feel that vacancies are picking up.”

The number of people in employment rose by 76,000 over the quarter.