Media playback is unsupported on your device Media caption Mark Hoban, Employment Minister: "There are some positive and encouraging signs"

The number of people out of work fell by 7,000 to 2.59 million in the three months to July, compared with the previous three month period.

The unemployment rate was 8.1%, down 0.1% on the previous quarter.

The number out of work for more than a year was 904,000, the highest since 1996, official figures showed.

But the Office for National Statistics (ONS) also said the number of people claiming Jobseeker's Allowance fell by 15,000 in August to 1.57 million.

The drop in the number of claimants was the largest since June 2010.

Games boost

The number of people in work increased by 236,000 to 29.6 million, the largest quarterly rise for two years.

UK unemployment rates North East 10.4%

North West 9%

Yorkshire/Humber 10%

East Midlands 8.3%

West Midlands 8.8%

East 6.5%

London 8.9%

South East 6.3%

South West 5.7%

Wales 8.9%

Scotland 8.2%

Northern Ireland 8.2% How to become your own boss

The ONS said the Olympic Games was likely to have been a factor behind the jump in employment, with London accounting for 91,000 of the increase.

The number of people in part-time work rose by 134,000 to 8.12 million, the highest level since 1992, when these numbers began to be collected.

This figure includes 1.42 million people - a record number - who would like to work full-time but are unable to find such employment.

With the UK economy in a double-dip recession, a number of economists said the jobs figures presented a puzzle.

"Why are we seeing GDP [gross domestic product] so weak yet unemployment, and particularly employment growth so strong?" asked George Buckley, an economist at Deutsche Bank.

He went on to say that previous quarterly increases in employment of this size had heralded recovery, saying "it is a very exceptionally strong report".

Men, women and youth

David Freeman from the ONS said women were driving the recent fall in unemployment: "The decrease in unemployment over the last three months, it's all down to women. We've actually seen a small increase in the number of men unemployed."

The number of unemployed women fell by 16,000 to 1.1 million, with the number of men out of work rising 9,000 to 1.49 million.

The closely-watched category of youth unemployment saw the number of 16 to 24-year-olds who are out of work rise by 7,000 to 1.02 million.

Employment Minister Mark Hoban told the BBC the figures painted a mixed picture: "There are some positive and encouraging signs there. But there are also some challenges too.

"We're not complacent about youth unemployment - we need to do more to get young people into work."

The shadow work and pensions secretary, Liam Byrne, said the government idea of getting young people who had worked at the Olympics to attend jobs fairs was not enough.

"A simple, fair tax on bankers' bonuses could create a fund of several billion pounds, and we could use half of that to kick start the construction industry... to get over 100,000 young people back to work."