Unemployment had been 4.2% in the quarter to the end of June, the Office for National Statistics added in a statement.

Average regular earnings growth, excluding bonuses, stood at 7.8% in the three months to the end of July.

“Wage growth remains high, partly reflecting one-off payments to public sector workers, but for real wages to grow sustainably we must stick to our plan to halve inflation,” finance minister Jeremy Hunt said in reaction.

Prime Minister Rishi Sunak at the start of 2023 said he hoped to halve UK annual inflation when the level stood above 10%.

But it remains at 6.8%, the highest among G7 nations.

“The tightness of the labour market continued to ease in July,” noted Ashley Webb, UK economist at Capital Economics research group.

“But the… wage growth will only add to the Bank of England’s unease and supports our view that the Bank will raise interest rates once more, from 5.25% currently to a peak of 5.5%” at its regular policy meeting next week.