Labour has accused the government of creating a "jobless generation" after the latest set of unemployment figures.

Data shows that there were 2.67 million people unemployed in Britain over the last three months of 2011 - up 48,000 on the quarter.

This takes the quarterly rate up by 0.1 to 8.4 percent, a 17-year high.

Employment numbers were up, however, by 60,000 on the quarter - a 0.1 percent rise.

"This government is creating a jobless generation, with more young people out of work than ever before," Liam Byrne MP, Labour's shadow work and pensions secretary, said.

"Today's figures make for grim reading for the millions of squeezed families desperate for good news on the economy.

"With unemployment at its highest rate since 1995 and long term youth unemployment doubling in the last year, ministers must now get a grip."

Latest unemployment figures show that the situation is stabilising, argues the government.

"The latest figures show some encouraging signs of stability despite the challenging economic climate," Lord Freud, minister for welfare reform, said.

"With more people in employment and a rise in vacancies it is clear the private sector is still creating jobs."

Freud insisted the government is not complacent.

"With more people in the labour market we know that competition for those jobs is tough and we will continue to make it our priority to find people work," he said.

A recent study by the Trade Union Congress, which used the US method for calculating unemployment, found that there are 6.3m people out of work in Britain.