This is the largest increase in nearly two years said the ONS.
The jobless rate now stands at 7.9%.
Youth unemployment also rose sharply, by 78,000 to 973,000.
The total claiming Jobseeker’s Allowance rose by 20,300 in August to 1.58m.
The number of people in employment in the economy fell in the three months to July, by 69,000 to 29.17m.
An increase in private sector employment of 41,000 partially offset a fall in public sector employment of 110,000.
Chris Grayling, employment minister, said: “Today's figures underline the scale of the challenge that we face particularly given slower growth across Europe and North America.
“Unemployment remains lower than it was six months ago but clearly we must continue to focus our efforts on supporting business growth and ensure that people who do lose their jobs have the best possible support to get back into employment.”
