UNEMPLOYMENT in the North-East dropped again last month - bucking the national trend.

Across the UK, unemployment figures rose by more than 100,000, while a record 7.9 million people are now classed as economically inactive, figures showed.

Manufacturing jobs continued to be axed, down by 106,000 in the latest quarter compared with the previous year, to a record low of 3.09 million. The number of people out of work increased by 108,000 in the last quarter of 2005 to 1.54 million, the highest total for four years.

The jobless rate rose by 0.3 per cent to 5.1 per cent, the highest for three years.

But in the North-East, the jobless total dropped by 1,000 to 78,000 - an unemployment rate of 6.5 per cent.

This was higher than any area of the UK outside London, which has a rate of 7.3 per cent.

Maggie Pavlou, president of the North-East Chamber of Commerce, said: "The North-East has bucked the national trend with more people in work and both the number of people classed as economically inactive and the claimant count going down.

"There is no doubt that companies are having to work extremely hard in the current climate, but the latest data has all indicators heading in the right direction."

In Yorkshire, unemployment rose by 21,000 to 135,000, a rate of 5.3 per cent.

A big increase in the number of students not looking for work boosted the economically inactive total across the UK to 7.95 million, the highest figure since records began in 1971. The figure includes people caring for relatives, taking early retirement and those who have given up looking for work.