Unemployment fell in the three months to September, new statistics show.
Figures from the Office for National Statistics reveal that unemployment fell by 49,000 to 2.51m.
The ONS said the unemployment rate was 7.8%, down 0.2% on April to June 2012.
In another good sign for the Treasury, total pay - including bonuses - rose by 1.8% compared with July to September 2011.
However, the number of people claiming Jobseeker's Allowance rose by 10,100 to 1.58m.
Employment minister Mark Hoban welcomed this morning's figures, and claimed there were "some really positive signs" in the economy.
"This is another good set of figures," he told BBC News. "There are still some real challenges out there. We need to tackle the challenge of long-term unemployment and we need to get more people into work."
But Shadow Work and Pensions Secretary Liam Byrne said there were "some real worries" beneath the headline figure, and claimed there had been "a very sharp increase" in long-term unemployment.
“I don’t think ministers should be complacent for a moment about the trend. There are real worries in the monthly figures," he said.
“There is now fresh evidence that Britain is becoming divided – long-term unemployment rose yet again, so did long-term youth unemployment and unemployment in two-thirds of England is higher than it was at time of the general election.
TUC general secretary Brendan Barber also welcomed the news, but warned there were "still big challenges ahead" for the economy.