Britain’s unemployment rate eased back further in February and job vacancies surged as firms prepared to reopen after lockdown in a sign of hope for the battered jobs market.

The Office for National Statistics (ONS) said the jobless rate fell to 4.9% between December and February, down from 5% in the previous three months.

Most experts had expected it to rise to 5.1%.

But the figures also showed the number of workers on UK payrolls fell by 56,000 in March after three months of increases, as the pandemic continued to take its toll.

Overall there were 813,000 fewer workers on payrolls than in March 2020, with more than half of those – 436,000 – aged under 25.

The ONS said there were further signs that the jobs sector is stabilising, with statistics signalling a near-16% jump in vacancies in March.

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.”

He added: “With the prospect of businesses reopening, there was a marked rise in job vacancies in March, especially in sectors such as hospitality.”

Chancellor Rishi Sunak has extended the furlough scheme to support workers through to the end of September and experts predict unemployment will ramp up once it ends.

The Office for Budget Responsibility – the UK’s official economic forecaster – predicts the unemployment rate will soar to a peak of 6.5% by the end of 2021.

But it is hoped that the economy will bounce back from a record 10% plunge in 2020 as restrictions ease and the vaccination programme continues to roll out, helping soften the blow on the jobs market.

In response to the latest jobs data, Mr Sunak said: “Protecting jobs and the economy has been my main focus since this pandemic began – through the furlough scheme alone we have protected 11.2 million jobs.

“As we progress on our road map to recovery I will continue to put people at the heart of the Government’s response through our Plan for Jobs – supporting and creating jobs across the country.”

Overall unemployment stood at 1.68 million between December and February, down 50,000 on the previous three months, according to the ONS.

Employment was down 73,000 on the quarter at 32.4 million.

The claimant count – another measure that includes people working with low incomes and hours, as well as people who are not working – rose 0.4% month-on-month to 2.7 million in March.

The figures also showed average pay excluding bonuses rose by 4.4% in the three months to February, yet with many jobs axed being lower-paid roles, the underlying increase is around 2.5%, the ONS said.

Howard Archer, chief economic adviser to the EY Item Club, said the data signals that the repeated extensions to furlough are “having a significant impact in limiting job losses”.

“There are also now mounting signs that businesses are becoming increasingly confident in the UK’s economic outlook and are more prepared to take on workers,” he said.

Mr Howard now expects the unemployment rate to peak at below 6% in the fourth quarter, against previous expectations that it could soar to 7%.