The UK’s unemployment rate has risen to its highest for almost a year as vacancies continued to shrink, according to official figures.

The Office for National Statistics (ONS) said the jobless rate increased to 4.3% between January and March – the highest since May to July last year.

The number of vacancies also slowed meaning more unemployed people are competing for the same jobs.

The ONS suggested that the figures show the country’s job market is cooling.

Jobs on offer in the UK dropped by 26,000 to 898,000 vacancies between February and April. The total remains higher than pre-pandemic levels but Liz McKeown, director of economic statistics at the ONS, said: “With unemployment also increasing, the number of unemployed people per vacancy has continued to rise, approaching levels seen before the onset of Covid-19.”

She added that overall: “We continue to see tentative signs that the jobs market is cooling.”

Data also shows that wage growth remained at 6%, the ONS said.

It had been expected to slow to 5.9% in the first three months of this year. The figure will be closely watched by the Bank of England to decide if and when interest rates can be cut.

At the most recent rate-setting meeting, Bank governor Andrew Bailey said he was “optimistic that things are moving in the right direction”, though he added that a fall in borrowing costs was “not a fait accompli”.

Rates have been 5.25% since last August, the highest level in 16 years.