Unemployment fell again in November to to 5.8 per cent - its lowest level in more than six years.
The Office for National Statistics said that the number of people without a job dropped by 58,000 to 1.9 million, while pay grew faster than inflation.
It was the smallest decline since the three months to September 2013, however, raising fears that previously seen rapid pace of job creation has slowed.
The ONS data also showed that average weekly earnings, excluding bonuses rose 1.7 per cent in November compared with the same month last year.
That was slower than growth of 1.9 per cent in October but it was the third month in a row that earnings by that measure rose faster than inflation after lagging for five years.
Inflation, according to the consumer price index, stood at 1.0 per cent in November and then fell to 0.5 per cent in December as global oil prices tumbled further.
Pay has picked up recently, though in real terms it is still well below its levels before the financial crisis.
Nonetheless the figures will be a welcome boost for David Cameron's Conservatives ahead of the May election and could undermine Labour's campaign, which has focused on what it calls Britain's cost of living crisis.
The data will be closely watched by the Bank of England, which looks at wages when considering interest rates decisions.
Additional reporting by ReutersReuse content