The number of Britons claiming unemployment benefit fell in February to a 20-month low, official data showed on Wednesday, in a boon to the Chancellor a few hours before he presents his annual budget.
The Office for National Statistics said the number of people claiming jobless benefit dropped by 1,500 last month to 1.542 million - the lowest level since June 2011.
However, analysts had expected a drop of 5,000 from January, and January's decline was revised to 10,000 from 12,500.
The number of people without a job on the wider and more lagging ILO measure grew by 7,000 in the three months ending in January to 2.516 million.
The ILO jobless rate held at 7.8 percent, in line with forecasts.
Chancellor George Osborne is set to stick to his guns on austerity, aimed at erasing Britain's gaping budget deficit and costing hundreds of thousands of public-sector jobs.
Total public-sector employment fell at the end of last year for the 13th quarter in a row, dropping to 5.722 million - the lowest since the fourth quarter of 2001, the ONS said.
The politically sensitive number of young people without a job ticked up to 993,000 in the three months to January, taking the unemployment rate for 16- to 24-year-olds to 21.2 percent.
The ONS said average weekly earnings growth including bonuses slowed to 1.2 percent in the three months through January compared to a year earlier and undershooting forecasts for a 1.5 percent rise. Excluding bonuses, pay also grew by 1.2 percent, the slowest rise since the three months to December 2009.
Inflation stood at 2.7 percent over the same period, rising to 2.8 percent in February, and is expected to climb further, squeezing Britons' budgets and hence undermining their ability to drive the economy.
(Reporting by Olesya Dmitracova and Peter Griffiths)