Media playback is unsupported on your device Media caption Work and Pensions Secretary Iain Duncan Smith: "It's the private sector one should take our hats off to"

The number of people out of work fell by 46,000 to 2.56 million in the three months to June, according to the Office for National Statistics (ONS).

The unemployment rate fell to 8.0% in the period, down from 8.2% in the previous quarter.

The ONS also said number of people claiming Jobseeker's Allowance fell by 5,900 to 1.59 million in July.

The number of people working part-time because they could not find a full-time job hit a record high.

It was up 16,000 in the three months to June to 1.42 million, which was the highest figure since records began in 1992.

But analysts pointed out that the overall figures were distorted in the run-up to the Olympics.

"As the ONS have made clear, there's an Olympic Games effect, so the difficulty for the market running up to it was would it be seasonally adjusted out or not, and in the event they haven't," said Tom Vosa at National Australia Bank.

"So the expectation will be that this [decrease in unemployment] is short-lived and will pop back up again in maybe August or September."

Media playback is unsupported on your device Media caption Shadow work and pensions secretary Liam Byrne: "You've got some worrying signs beneath the surface"

'Good news'

In the 16-to-24 age group there were 1.01 million people unemployed, down 4,000 from the three months to March.

"The robustness of these figures is good news," said Work and Pensions Secretary Iain Duncan Smith.

"The work we're doing through the youth contract and through the work programme and through work experience should be supported by people like the trade unions and the Labour Party instead of being carped at by them, which is what they do the whole time."

The curious case of the UK labour market that wouldn't quit is likely to keep Britain's economic minds enthralled for some time to come

Shadow work and pensions secretary Liam Byrne said: "It looks like about 90% of the fall in unemployment has been in London where there has obviously been a boost from the Olympics."

"In about half of Britain's regions you've got unemployment going up. I think the government needs to act now to to put a lot more fuel in the tank of its back to work programmes before things get any worse."

Youth unemployment

Trade union umbrella body the TUC has warned the job outlook for the young is its toughest since 1994.

In a report ahead of the unemployment figures, it said the proportion of young people in full-time education had risen from 24% in 1992 to 41% this year.

"Students looking to start their careers or continue in their education next month are facing the toughest climate for nearly 20 years," said the TUC general secretary Brendan Barber.

UK unemployment rates North East England 10.4%

Yorkshire and the Humber 9.8%

North West England 9.1%

West Midlands 8.8%

London 8.7%

Wales 8.6%

East Midlands 8.3%

Scotland 7.9%

Northern Ireland 7.6%

East of England 6.6%

South East 6.3%

South West 5.8% Map of regional unemployment

"It's particularly worrying that long-term joblessness for young people is still rising, even as overall unemployment falls. If this continues we could lose a generation of talented and highly qualified youngsters to blighted careers, debt and under-achievement."

A spokesperson for the Department for Work and Pensions said that, despite the falling youth unemployment figures, "this is still a big challenge and we don't underestimate it for one moment, which is why we are committed to helping young people get the skills and experience they need to get a job".

"Over the next three years the Youth Contract will offer nearly 500,000 opportunities for young people through work experience, apprenticeships and wage subsidies to help them find work."

The number of people unemployed for more than two years was 422,000 in the three months to June, down 4,000 from the three months to March.

Unemployment fell for the fifth month in a row in Scotland, dropping by 5,000 to 214,000 in the three months to June.

Unemployment in Wales fell by 7,000 between April and June to 126,000, while the claimant count fell to 79,600 in July.

Among the English regions, the North East had the highest rate of unemployment, coming in at 10.4% for the three months to the end of June, while the lowest rate was in the South West, at 5.8%.