The number of unemployed people in the UK fell to its lowest level in a decade between September and November 2015 to 1.68 million, figures released by the Office for National Statistics (ONS) on 20 January showed.
The unemployment rate in the fourth quarter fell to 5.1%, the lowest level recorded since the three months to October 2005, while on a monthly basis the rate declined to 4.9% in November 2015, the lowest since September 2005.
There were 31.4 million people in work, with employment jumping by 267,000 more than the period between June to August 2015. Claims for jobless benefits slid 4,300 in December 2015 as the claimant remained unchanged at 2.3%. In November 2015, the total dropped 2,200 instead of the 3,900 increase originally estimated, the ONS added.
Meanwhile, pay excluding bonuses rose 1.9% year-on-year in the quarter to the end of November 2015, a slight decline from the 2% gain recorded in the previous three months. The figure was slightly above the 1.8% increase analysts had expected.
Elsewhere, total pay growth, including bonuses, slowed down to 2% in the three months to November 2015, compared with 2.4% in the previous quarter.
"Even these meagre rate of pay growth therefore suggest that unit labour costs are rising quickly enough to pull inflation back to its target, once the drag from lower oil prices has worked its way through," said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.
"With the labour market now extremely tight and the National Living Wage set to be introduced in April, the first half of 2016 likely will see a renewed renewed acceleration in wages, bringing interest rate hikes swiftly back into focus."
Official figures released on 19 January showed consumer price inflation in the UK edged slightly higher in December. According to the ONS, Britain's consumer price index (CPI) grew by 0.1% month-on-month in December, while analysts had expected growth to remain stagnant, as it had been in the previous month.
On a year-on-year basis, CPI rose by 0.2% in the last month of 2015, generally in line with analysts' expectations and up from the 0.1% recorded in November, driven higher by movements in transport costs, particularly air fares and, to a lesser extent, motor fuels.