A total of 2.68 million people were unemployed in November, up 118,000 from a quarter earlier, the Office for National Statistics said in a statement.
The unemployment rate rose to 8.4 percent in the three months to November, the highest level for 17 years, the ONS added.
Prime Minister David Cameron described the data as "disappointing" and said it was a "tragedy" for people to lose their jobs but stressed that the ONS also pointed out that employment rose by 18,000 in the three months to November.
The ONS said in its statement: "The unemployment rate was 8.4 percent of the economically active population, up 0.3 (percentage points) on the quarter.
"There were 2.68 million unemployed people, up 118,000 on the quarter. The unemployment rate has not been higher since 1995 and the number of unemployed people has not been higher since 1994."
The Conservative-Liberal Democrat coalition had hoped that the private sector would create enough jobs to offset heavy losses in the public sector but the economy has been hit hard by the debt crisis in key trading partner the eurozone.
"Any increase in unemployment is disappointing and it is obviously a tragedy for the person who becomes unemployed," Cameron told parliament following the latest data.
"It is noteworthy that, while the increase in unemployment is hugely unwelcome, there is still an increase in the number of people employed."
Ben May, an economist at research group Capital Economics, said British unemployment was set "to rise much further" after Wednesday's "mixed bag" of data.
"The recent slowdown in the wider economy is yet to have its full impact on the labour market and survey evidence suggests that firms plan to lay off workers at a faster pace in the coming months. And public sector employment has further to fall," he added.
Some analysts have warned that Britain will officially be back in recession by the end of the first quarter of this year. Despite falling inflation, Britons are holding back from spending money.
This has led a number of companies to lay off thousands of workers since the start of the year.
"Weakened economic activity, low business confidence and mounting public sector job cuts look set to take a serious toll on jobs through much of 2012," said Howard Archer, chief UK economist at consultancy IHS Global Insight.
"We suspect that the economy was stagnant at best over the fourth quarter of 2011 and expect it to contract in the early months of 2012 before stabilising towards mid-year and returning to modest growth in the second half."
The technical definition of a recession is two successive quarters of contracting economic output.