Fewer people need to visit Job Centres

The government's preferred jobless measure, the so-called ILO figure, fell to 1.41 million, Office for National Statistics data showed.

Meanwhile, the number of people claiming unemployment benefit last month fell by 6,000 to 876,300.

With the unemployment rate at 4.7%, more people are in work than at any time since 1984, when records began.

The ONS added that average earnings rose by 5.2% in the year to March, up by 0.3% from the previous month.

'Economic success'

The ONS added that the number of people in work had soared to 28.35 million in March, rising 195,000 during the quarter.

The ONS also said that the number of so-called "economically inactive" people - which includes those not looking for a job or who do not want to work - fell by 80,000 to 7.76 million during the three months to March.

Jane Kennedy, minister of state for work, welcomed the figures saying: "Full employment is now within reach.

"This has been made possible through economic success, with consistently low inflation and interest rates, combined with a wider range of active help and support for those without work than has ever been available before."

However, the manufacturing sector is still suffering, with jobs at their lowest level since records began in 1978.

TUC General Secretary Brendan Barber said: "The job market continues to go from strength to strength but manufacturing workers are still losing their jobs in droves.

REGIONAL JOBLESS RATES North East - 5.3% North West - 4.6% Yorkshire/Humber- 4.7% East Midlands - 4.7% West Midlands - 5.5% East - 3.4% London - 6.9% South East - 3.9% South West - 2.9% Wales - 4.5% Scotland - 5.7% Northern Ireland - 5.2% Source: ONS

"UK economic growth depends on a manufacturing recovery and today's figures show it was premature to suggest the sector was out of the woods.

"There is no room for complacency, companies need to invest more and government investment must rise to the level of our European competitors."

But the figures, pointing to a strong labour market, could still be a concern for the Bank of England.

Pay packets are rising at the fastest pace in nearly three years - signalling a tightening in the Labour market.

Wages surge

Average earnings were growing at an annual rate of 5.2% over the three month period - up from 4.9% - and the fastest pace of growth seen since June 2001.

The Chartered Institute of Personnel and Development said the figures showed wage inflation was still increasing and the trend looks likely to continue.

Spokeswoman Rebecca Clake said: "Employers are wrestling with competing pressures.

"Significant wage inflation could damage growth in the private sector or the expected service improvements following government investment in the public sector.

"However, recruitment pressures and skills shortages are leaving some employers with little choice but to raise salaries to attract the best candidates in the short-term."

Experts say the rise could boost broader inflationary pressures and warrant further Bank of England interest rate hikes.

"The concern now is that the central bank may up the pace of rate hikes and the next rate rise could be in July," said Marc Ostward at bond broker Monument Securities.

Further data showed the UK's trade gap with the rest of the world remained mainly steady during March.

The global deficit in trade in goods shrank slightly to �4.051bn from �4.053bn and the deficit with EU countries stood at �2.035bn compared to �2.038bn.

While the figures were barely changed the ONS said the latest estimate of the trend suggested that the UK trade deficit is widening - as the total global trade gap widened to a record �13.7bn.