UK unemployment falls further - employment hits highest level since 1971

The number of unemployed people in Britain dropped by 97,000 to 1.86 million for the October to December period, according to the Office for National Statistics (ONS). Employment increased by 103,000 to close to 31 million - the highest since records began in 1971.

The strong labour market and pay figures boosted the value of the pound against other currencies.

Sterling rose 0.6% against the dollar to $1.5437 after the data was released, and jumped 0.8% against the euro to €1.3557.

The unemployment rate now stands at 5.7% of the adult working population. The body said the employment rate, or level of people in work, was 73.2%, its joint highest rate.

Average earnings including bonuses were up 2.1% in the quarter compared with a year earlier.

Earnings rose by 1.7%, excluding bonuses, says BBC News.

CPI inflation was 0.5% in December, and new data released on Tuesday showed the rate fell to 0.3% in January, its lowest level since records began.

James Sproule, chief economist at the Institute of Directors (IoD), said wages would continue to rise as competition for talent intensified.

Meanwhile, the data shows that self-employment has fallen. Over the quarter the number of self-employed fell 19,000 to 4.4 million.

Long-term unemployment also declined, by 210,000 among those out of work for more than a year, to 638,000.

Meanwhile, the number of people claiming Jobseeker's Allowance fell 38,600 in January to 823,000, the 27th straight monthly fall.

The unemployment rate for 16 to 24-year-olds was 16.2% for the October to December period, which was unchanged on the previous quarter.