The threat of a potential vote to leave the EU in June could be partly to blame for the first rise in unemployment in seven months, the work and pensions secretary has warned.

Stephen Crabb said the latest labour report, which showed the unemployment total rose by 21,000 in the three months to February to 1.7 million, was a signal that the looming EU referendum vote was hitting the jobs market.

Crabb, who took over following the resignation of Iain Duncan Smith last month, said the uncertainty over the UK’s participation in the single market could be linked to the increase in joblessness.

He told the BBC: “Mark Carney, the governor of the Bank of England, has also said that the question mark hanging over Britain’s relationship with the European single market is having a real-terms impact on the British economy and impacting on sterling exchange rates, impacting on investment decisions.”

“There will be companies right now today who have been looking at major investments into the UK who are hanging back and considering whether that’s the right thing to do. So of course that will have an impact.

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