The rate of UK unemployment was 5.1 per cent between November and January, lower than for a year earlier at 5.7 per cent, new figures from the Office for National Statistics show.
UK unemployment fell to 1.68 million down 28,000 from the previous quarter.
There were 31.42 million people in work for the same period and 116,000 more than for August to October 2015.
The employment rate is 74.1 per cent, which is the joint highest since current records began in 1971, the ONS also shows.
Doug Monro, co-founder of jobs website Adzuna, says despite the positive outlook, “challenges lie ahead”.
He says: “A potential Brexit isn’t the only future hurdle – a much more immediate change is on the horizon.
“Next month’s national living wage is set to redefine the UK’s job landscape, particularly for low paid workers. It could be a real turning point and a long deserved boost in the battle against rising living costs.”
Average weekly earnings for employees in the UK increased by 2.1 per cent including bonuses and by 2.2 per cent compared with a year earlier.
Monro adds: “For employers, the national living wage equals a higher wage bill. Some companies won’t find it easy to adapt and many fear extra job losses – but this seems unlikely.
“Employee value is on the up and employers will have to take notice. However, more can be done to support low paid workers and today’s Budget may spark more action from the government.”