The rate of unemployment dropped to 4.9pc, down from 5.2pc in the previous three months, according to figures from the Office for National Statistics (ONS).

Joblessness in the UK is now at its lowest level since last summer.

UK unemployment rate (Image: PA Wire)

But businesses in the East fear unemployment could rise again in the coming months once firms feel the full impact of the Iran war, soaring energy and fuel prices, business rates rises and the jump in employment costs.

Candy Richards, the Federation of Small Businesses' regional manager for East Anglia, said it "does not reflect the current challenging climate in which small businesses are operating".

Candy Richards, Federation of Small Businesses development manager for East Anglia (Image: Supplied)

"Many firms across a wide range of sectors are signalling a slowdown as business and consumer confidence wanes whilst costs rise exponentially," she warned.

"Concerningly, March’s insolvency figures show an increase in the number of insolvent businesses, a trend that could continue if the government does not provide quick and proportional support for small businesses to reduce costs and taxes.

“With the outlook for the economy looking as ambiguous as ever, future unemployment rates will be highly dependent on the government putting words into action and backing small businesses as they try to get through this prolonged period of uncertainty."

Employment vacancies in the UK (Image: PA Wire)

The ONS’s unemployment data covered the period before the start of the US-Israeli war with Iran eight weeks ago.

Wage growth fell to its lowest level since the end of 2020, with regular pay rising by 3.6pc annually in the three months to February, down from 3.8pc.

Annual change in inflation-adjusted pay (Image: PA Wire)

The percentage of people who are unemployed and not looking for a job, known as economically inactive, rose to 21pc in the three months to February - up from 20.7pc in the three months before.

© Norwich Evening News