By Verena Vogt
The number of people out of work fell by 167,000 in the three months to November - the second biggest drop since records began in 1971.
A total of 2.32 million people were unemployed at the end of the quarter, the lowest figure in almost five years, according to new data from the Office for National Statistics (ONS).
The unemployment rate fell to 7.1 per cent - 0.5 per cent lower than in the quarter from June to August and 0.6 per cent lower than in the same period a year earlier.
It is now only 0.1 percentage point away from the 7 per cent threshold at which the Bank of England will decide whether to put up interest rates from their historically-low 0.5 per cent level.
However, the Bank has emphasised that interest rates will not go up automatically at that point.
Drop in people claiming jobseeker's allowance
There has also been another drop in the number of people claiming jobseeker's allowance.
The December figure fell by 24,000 to 1.25 million, the lowest level for almost five years and the 14th consecutive drop.
Elsewhere, the number of people in employment rose to a record high of more than 30 million, leading to an employment rate of 72.1 per cent.
This is a rise of 0.5 per cent over the three months to November.
The number of people in work was 280,000 higher than in the three months to August, and rose by nearly half a million compared to a year earlier.
Long-term unemployment reduces
Long-term unemployment - the number of people out of work for over a year - was down by 61,000 to 839,000 in the quarter.
Meanwhile the number of 16 to 24-year-olds out of work dropped by 39,000 to 920,000.
The number of people working part-time because they could not find full-time jobs also fell, by 12,000 to 1.4 million.
The ONS figures show that economic inactivity, which includes people who are looking after a relative, decreased by 22,000 and now stands at just under nine million.
It was also found that the average income rose by 0.9 per cent in the 12 months to November, which is unchanged from the previous month and gives a weekly wage figure of £475.