Unemployment has fallen for the second quarter in a row to 2.46 million, official figures show.
The number of new people finding employment between April and June was 184,000, the largest increase for over 20 years.
But the jobless only decreased by 49,000 and those claiming benefits fell by just 3,800 to 1.46 million.
The number of vacancies for the three months to July 2010 was 481,000, up 9,000 over the quarter.
Jeremy Cook, chief economist at World First, says: “The economic picture in the UK is still an absolute mess and I think another period of increased unemployment is just around the corner. The government’s austerity measures will bite hard into the workforce’s flesh in the coming months and growth will suffer.”
And Brian Johnson, insolvency practitioner at chartered accountants, HW Fisher & Co, says: “Any drop in unemployment is welcome, but today’s figures will ring hollow in light of what is to come.
“The scale of the cuts facing The Ministry of Justice, revealed earlier this week, offers an insight into just how extreme the public sector cull will be. The theory is that the private sector will take up the slack but in practice this is highly unlikely.”