Unemployment has fallen to its lowest level for a year after a big jump in the number of people in work, especially in London, suggesting a jobs boost because of the Olympic Games.
The jobless total fell by 46,000 in the quarter to June to 2.56 million, a trend seen for the past few months.
The number claiming jobseeker's allowance last month was 1.59 million, down by 5,900 on June, while almost 30 million people were in work, up by 201,000.
Most of the quarterly fall in unemployment was recorded in the capital which has just hosted the Olympics and is gearing up for the Paralympics in two weeks' time.
The Government welcomed the news, saying private firms are creating jobs despite difficult economic times.
Analysts said the figures are "almost impossible" to explain, while union leaders warned that dole queues could start rising again.
Other data shows that the number of part-time workers reached a record high of 8.07 million.
The number working part-time because they cannot find a full-time job is 1.42 million, the highest since records began in 1992.
Youth unemployment fell by 4,000 to just over a million, but Age UK said there is disturbing news for older women because it is the only group not seeing a fall in unemployment.
Work and Pensions Secretary Iain Duncan Smith said: "These are positive and encouraging figures demonstrating the strength of our private sector, notwithstanding the difficult economic times, it is still creating jobs, the vast majority of which are full-time."
Shadow work and pensions secretary Liam Byrne said: "Ninety percent of the fall in unemployment was in London, long-term youth unemployment is still going through the roof and part-time work has hit an all-time high as people struggle to find a full-time job. Crucially, there are now huge warning signs on the road ahead."
Dave Prentis, general secretary of Unison, said: "This small fall is welcome but there will be no lasting Olympics legacy in the jobs market. The end of thousands of temporary jobs will see unemployment climbing after the summer."
TUC general secretary Brendan Barber said: "Today's fall in unemployment is welcome but there are worrying trends brewing and with the economy getting smaller, it may only be a matter of time before the dole queues start rising again."
Graeme Leach, chief economist at the Institute of Directors, said: "The only certainty in the latest labour market figures is uncertainty."
Howard Archer, chief economist at IHS Global Insight, said: "The labour market continues to defy gravity and is performing remarkably well given the extended weakness of the economy. It is very hard to reconcile employment growth of 201,000 in the three months to June with GDP contraction of 0.7% quarter on quarter in the second quarter, especially as this was a third successive quarter of decline."
There was an increase of 1,600 in the number of women claiming jobseeker's allowance, to 530,000, compared with a 7,500 fall among men, to just over a million.
The number of people classed as economically inactive, including those looking after a sick relative, on early retirement or who have given up looking for work, fell by 117,000 to 9.1 million, just over 22% of the working-age population.
Around 150,000 people were made redundant in the three months to June, down by 21,000 from the quarter to March and 4,000 lower than a year ago.
Sectors showing the biggest increase in jobs in recent months include wholesale, retail and motor vehicle repairs.
There were 472,000 vacancies across the country in the quarter to July, up by 10,000 on the three months to April, and 16,000 more than a year ago.
Average earnings increased by 1.6% in the year to June, up by 0.1% on the previous month.
Unemployment in the regions between April and June was:
Region Total Change on Unemployment
unemployed quarter rate
North East 134,000 minus 14,000 10.4%
North West 319,000 minus 10,000 9.1%
Yorkshire/Humber 266,000 plus 25,000 9.8%
East Midlands 193,000 plus 10,000 8.3%
West Midlands 235,000 plus 7,000 8.8%
East 205,000 minus 4,000 6.6%
London 366,000 minus 42,000 8.7%
South East 283,000 plus 2,000 6.3%
South West 157,000 minus 18,000 5.8%
Wales 126,000 minus 7,000 8.6%
Scotland 214,000 minus 5,000 7.9%
N Ireland 66,000 plus 8,000 7.6%