The number of people out of work fell by 65,000 to 2.58 million in the three months to May, according to the Office for National Statistics.

The unemployment rate fell to 8.1% in the period, down from 8.3% in the previous quarter.

The ONS figures showed that the number of people in employment rose by 181,000 to 29.35 million.

However, the number of people claiming Jobseeker’s Allowance rose by 6,100 to 1.6 million in June.

The number of long-term unemployed also increased, with those out of work for more than two years rising by 18,000 to a total of 441,000, the highest since 1997.

Unemployment among 16 to 24-year-olds fell by 10,000 to 1.02 million.

The number of self-employed people went up by 32,000 or 0.8% to 4.16 million.

Average total earnings were 1.5% higher in the year to May, the ONS said. When bonuses are excluded, regular pay rose 1.8% from a year earlier.

Olympics boost?

Howard Archer, an economist at IHS Global Insight said: “It is evident that restrained earnings growth as well as significant increases in part-time jobs and self-employment is helping to keep unemployment down.

“In addition, the imminent holding of the Olympic Games is currently providing a boost to employment,” he said.

However, Peter Dixon of Commerzbank warned that it was “entirely possible that there will be a temporary boost due to Olympics, possible that there will be more to come, but if this is Olympic-related temporary hiring, it is likely to be unwound again later in the year”.

On this point, the figures showed that the number of people in work in London hit a record 3.88 million, the highest level since regional employment records began in 1992.

However, as London’s population has now risen to 8 million, London’s unemployment rate remains relatively high at 8.9%.

BBC