Unemployment in the UK has increased to 2.67 million (Reuters / LukeMacgregor)

The UK unemployment rate has risen to 8.4 percent - its highest level in 17 years.

Figures released by the Office of National Statistics show a 28,000 increase in the number of unemployed people to 2.67 million during the three months to January.

It represents a 0.1 percent increase on the previous quarter's unemployment rate, making it the highest since 1995, although it did represent the smallest quarterly increase in almost a year.

The number of people engaged in part-time work because they could not find a full-time position increased by 110,000 for the quarter, hitting 1.38 million, the highest figure in 19 years.

Youth unemployment continued to rise, increasing by 16,000 and hitting 1.042 million, a rate of 22.5 percent.

The number of people in employment of any kind increased by 9,000 on the quarter, but decreased by 44,000 compared to the previous year.

February saw an increase of 7,200 people claiming Jobseekers' Allowance from January, bringing the total to 1.61 million.

The public sector suffered more than the private sector, with a drop of 37,000 public sector employees compared to a 45,000 increase in private workers.

Average earnings increased by 1.4 percent compared to the previous year, a drop of 0.5 percent from the 1.9% increase in December.

Matt Gascoigne, executive director at recruitment consultants Badenoch & Clark, said the figures "paint a bleak picture for the UK workforce".

"The trend for employers to be ever more picky about skills and experience shows no sign of abating, making the process of finding work much tougher for jobseekers in both the public and private sectors," he said.

TUC general secretary Brendan Barber said that while the rise in overall employment was encouraging, part-time positions were not sufficient to replace a full-time job.

"The sharp fall in pay increases is also worrying as it will prolong the painful squeeze on family incomes throughout the year," he said.

"Over a quarter of a million public sector jobs were lost in the last year and the private sector recovery we were promised is not materialising."

He called on chancellor George Osborne to put the job crisis at the forefront of the upcoming budget.

A spokesman for the Department of Work and Pensions said the number of people claiming out-of-work benefits had dropped by 45,000 since May 2010.