North East unemployment remains the highest in the UK outside London despite a mixed picture in official figures released today.

Data from the Office for National Statistics showed that the headline rate for unemployment in the region had fallen to 5.7% in the three months to the end of February.

But the number of people claiming unemployment benefit - a more up-to-date figure - had risen to 119,905, an increase of nearly 50,000 in the last 12 months.

Nationally, the pandemic has seen London emerge as the region’s unemployment blackspot, with levels of joblessness in the capital now standing at 7.2%.

There are also fears that the Goverment’s Job Support Scheme could be masking deeper-rooted problems in the economy, with around five million people in the country still on furlough.

Suren Thiru, head of economics at the British Chambers of Commerce, said: “Unemployment remains on course to peak towards the end of 2021, once the furlough scheme expires and those who stopped job hunting during the pandemic look to return to the workforce as restrictions ease.

“Although the furlough scheme will limit the peak in job losses, the longer-term structural unemployment caused by Covid-19, particularly among young people, may mean that the road back to pre-pandemic levels lags behind the wider economic recovery.

“Further action will be needed to support the labour market when the furlough scheme ends, including supporting businesses to recruit and retain staff through a temporary cut in employer national insurance contributions.”

Darren Morgan, director of economic statistics at the ONS, said: “The latest figures suggest that the jobs market has been broadly stable in recent months after the major shock of last spring.

“The number of people on payroll fell slightly in March after a few months of growth.

“There are, though, over 800,000 fewer employees than before the pandemic struck, and with around five million people employed but still on furlough, the labour market remains subdued.

“However, with the prospect of businesses reopening, there was a marked rise in job vacancies in March, especially in sectors such as hospitality.”

Employment Minister Mims Davies said: “Today we see another drop in unemployment, vacancies on the rise and over half a million people people joining payrolls in the last month.

“But it remains a challenging time for many. Our roadmap is key to our recovery as sectors reopen safely-we are determined to build back better.”