Overall unemployment levels have fallen slightly, but the number of those without work for over 12 months has hit a 13-year high.
Figures from the Office for National Statistics (ONS) showed unemployment decreased by 0.2% to 7.8% in the three months to June 2010.
The news that 49,000 fewer people are out of work was overshadowed by a bleak forecast from the Bank of England, which predicted in its August inflation report that the UK economy would only grow by around 2.5% in 2011.
Shadow employment minister Jim Knight said the action taken by the Labour government last year had proved effective in boosting the jobs market.
"But, as we face huge cuts in spending, private sector jobs growth is neither strong or sustained enough to take on those people who will lose their jobs due to the government's spending cuts," he warned.
"Now is absolutely the wrong time to withdraw support for the economy and jobseekers -and the coalition government is wrong to abandon people to unemployment and risk the recovery which will cost us all more in the long run."
The number of people unemployed for up to twelve months fell by 82,000, to reach 1.66 million, the ONS said.
Employment minister Chris Grayling focused on the number of people on the three main out-of-work benefits, which remained static at almost five million.
"These figures are a small step in the right direction, though we absolutely do not underestimate the scale of the economic challenge we face," he said.
"The fact that there are still five million people on out of work benefits underlines the scale of Britain's welfare challenge and shows that we are right to radically overhaul our welfare system.
"Our reforms will mean that people are always financially better off in work; people will no longer be trapped in a life on benefits."