"Latest estimates from the Labour Force Survey show that following a period of a continuous decline, the number of unemployed people increased by 46,000 to 1.47 million", the ONS says in a statement.
British households have lost some of their spending power due to higher inflation, caused by the post-referendum fall in the pound.
The unemployment rate rose by 0.1 percentage points compared with the previous quarter to 4.4% in the three months to December 2017.
The number of Britons in work grew less than expected, rising by 88,000, about half the consensus forecast in a Reuters poll of economists. In total, there were 1.47 million unemployed people, 46,000 more than for the three months to September but it's 123,000 fewer than recorded previous year. They may also fuel speculation that the Bank of England could raise interest rates again as early as May after policy makers said the Brexit vote had lowered the pace the economy can grow without fanning inflation. And productivity growth has seen its strongest two quarters since the 2008 recession. And private sector pay growth accelerated to 2.6% from 2.3%. BoE policymakers will be watching closely for signs that employers - who have found it harder to recruit workers since the 2016 Brexit vote - have offered improved pay settlements at the start of the year.More news: Police name Netanyahu associates in corruption probe
The UK has seen the sharpest increase in its unemployment rate in nearly five years, according to the latest data published by the Office for National Statistics. The number of Eastern European workers fell. Separate ONS figures showed finance minister Philip Hammond likely to meet his target for cutting Britain's budget deficit this year with room to spare.
A further tranche of official data showed the Government recorded a better than expected budget surplus of £10bn in January - a traditionally bumper month boosted by a surge of income tax receipts.
The figures from the Office for National Statistics (ONS) sent the pound a cent lower against the U.S. dollar to just over $1.39. On Wednesday it said it now looked clear that Hammond would undershoot this "by a significant margin".