Unemployment drops sharply – so are interest rates set to rise?

The number of jobless people plunged by 167,000 in the three months to November – the second biggest fall on record – to 2.32 million, the lowest number in five years, the Office for National Statistics says.

The Bank of England's monetary policy committee has said it will not lift interest rates above their historically-low level of 0.5% until the unemployment rate drops to 7%.

Analysts hadn't expected the threshold to be reached until later in the year, although the Bank has stressed a figure of 7% will not automatically trigger an interest rate rise.

The new unemployment rate of 7.1% is down by 0.5% from June-August, and by 0.6% from a year earlier.

The number of people claiming jobseeker's allowance in December also fell by 24,000 to 1.25 million, the lowest figure for almost five years. The so-called claimant count has now fallen for 14 months in a row.

Record high in work

Meanwhile, the number of people in work has reached a record high of just over 30 million, giving an employment rate of 72.1%, an increase of 0.5% over the quarter to November.

There was a fall in the number of people working part-time because they could not find full-time jobs – down by 12,000 to 1.4 million.

Economic inactivity – counting those who are looking after a relative, on long-term sick leave or who have given up looking for work – fell by 22,000 to just under nine million.

Average earnings increased by 0.9% in the year to November, unchanged from the previous month, giving a weekly wage of £475.