The Office for National Statistics also revealed a 88,000 increase in employment change in the period, which was half the 165,000 expected, but that it was a rise in the participation rate that pushed the unemployment rate up.
The number in unemployment rose by 46,000 to 1.47 million compared the previous three months.
"This is the sharpest increase in the unemployment level the ONS has seen in nearly five years", said Matt Hughes, a senior statistician from the ONS.
The quarterly rise was the biggest since early 2013, although unemployment is 123,000 lower than a year ago, according to the Office for National Statistics (ONS).
Average weekly earnings excluding bonuses increased by 2.5 per cent compared to a year earlier, the ONS said. This was the first increase in the unemployment rate in almost two years. Much of the national rise was due to big hikes in the jobless figures in Wales and the East of England.
"While stubbornly high inflation and signs of higher wage growth have increased the perceived likelihood of rates rising again, it's clear that policymakers will tread a cautious line amid the heightened uncertainty facing the United Kingdom economy as Brexit worries dominate", said IHS Markit economist, Chris Williamson.
British government bond prices rose and sterling briefly fell against the US dollar after Wednesday's figures showed the sharpest rise in the number of people out of work in nearly five years.
Workers' total earnings, including bonuses, rose by an annual 2.5 percent in the three months to December, as expected and unchanged from the three months to November.
The government recorded a January budget surplus of 10 billion pounds, slightly above forecasts, helped by strong income tax receipts which typically jump in that month. The number of Eastern European workers fell.
But TUC general secretary Frances O'Grady said the continued squeeze on real terms pay was "pushing families to the brink".
Looking at 2018 survey data, Chris Williamson at IHS Markit said the labour market was apparently continuing to tighten as staff shortages lead to higher pay rates.
Economist Ruth Gregory at Capital Economics said it was a "strong set of labour market figures should dispel concerns that the recent weakness was a sign of things to come".