The new Government has been boosted by figures showing a fresh fall in unemployment and a statement from the Bank of England, which said there was 'no clear evidence' of a slowdown in the UK economy following the vote to leave the EU.

UK unemployment fell by 54,000 to 1.65 million between March and May, official figures from the ONS revealed, leaving the unemployment rate at 4.9 per cent, down from 5.6 per cent a year earlier.

The jobless total is now the lowest for eight years, while the rate has its lowest point since the summer of 2005.

The jobless total is now the lowest for eight years, although the figures were taken before the referendum

Job vacancies were down 10,000 to 747,000, the latest ONS data revealed.

The stats come as the the Bank of England said the UK economy appeared to be holding up after last month's Brexit vote - although there were signs investment and hiring were on ice.

The BoE's regional agents - who are spread around the country and speak regularly with companies - added that business uncertainty 'had risen markedly' but there was little evidence so far that consumers were spending less.

Earlier this month the BoE predicted the economy would slow markedly as a result of the decision to leave the EU, and yesterday the IMF cut its growth forecast for Britain next year to 1.3 per cent from 2.2 per cent.

Investment intentions for the year ahead were little changed and pointed to modest growth, although there were reports of delays in decision-taking on corporate spending until after the EU referendum

The pound jumped after the employment data and comments from the Bank of England.

Against the greenback it is up 0.5 per cent at $1.317, while against the euro it has risen 0.6 per cent to €1.196.

The ONS employment stats also showed the UK received a minor pay rise, with average earnings increasing by 2.3 per cent in the year to May, up 0.3 per cent on the previous month.

Other figures showed that the number of people classed as economically inactive has fallen by 46,000 to 8.8 million, the lowest for 13 years.

But the figures received a mixed reaction from economists as the data was collected before the crucial EU referendum on June 23.

Consumer price inflation has edged higher, with the annual rate of decline in goods prices having eased a little further as the decrease in sterling since late 2015 started to be reflected in some prices, such as fuel

ONS statistician Nick Palmer said: 'The labour market continued to strengthen in spring 2016, with record employment and the unemployment rate at its lowest since 2005.'

But he warned: 'None of today's headline figures cover the period since the result of the EU referendum became known.'

Martin Beck, senior economic advisor to the EY ITEM Club, also urged caution after the latest data.

He said: 'Looking forward, although it is early days to assess the full implications of the UK's vote to leave the EU, there is the risk of a slowdown in the economy that may hurt job prospects.'

But new Chancellor Philip Hammond maintains that the UK economy is on solid ground.

He said: 'Today's employment and wage figures are proof that the fundamentals of the British economy are strong.'

Steady decline: UK Unemployment rate March to May 2011 to March to May 2016

Work and Pensions Secretary, Damian Green, added: 'This remarkable set of figures shows that there are more people in work than at any other point in our history, which is fantastic news as we build a Britain that works for everybody, not just the privileged few.'

While Suren Thiru, head of economics at the BCC, urged the Government to focus on policies that would enable the UK economy to remain a large scale employer.

He said: 'The government should guarantee that EU workers can stay in British firms following the referendum.

'To maintain business confidence, the government must provide clarity and stability, and press ahead with key infrastructure projects that will boost trade and productivity, empowering businesses to continue to grow and thrive.'