The employment rate reached a record high of 76.5 per cent, with 32.93 million people aged 16 and over in work, according to the Office for National Statistics (ONS).
There are 336,000 more people working compared to the same period a year earlier and an increase of 180,000 on the quarter.
However, wage growth slowed to 2.9 per cent for total pay (including bonuses) and 3.2 per cent for regular pay (excluding bonuses).
The Bank of England held rates at their current level of 0.75 per cent last month, although some economists had expected a cut based on a slowdown in economic growth.
‘Labour market strength’
Thomas Pugh, UK economist at Capital Economics, said: “Overall, the strength of the labour market in Q4 will give some comfort to the MPC that it was right to keep rates on hold at 0.75 per cent at its meeting on 31 January.
“Admittedly, there are signs of some slack had started to open. But we doubt that pay growth will fall much further without a drop in the unemployment rate.
“Of course, this is all old news, and the most recent surveys are suggesting that employment growth will continue to pick-up in Q1.
“We think that will contribute to the Monetary Policy Committee keeping rates on hold at its next meeting on 26 March as well.”
New chancellor Rishi Sunak added: “Since 2010 employment has grown and unemployment has fallen in every nation and region of the UK – but we need to do more to share opportunity across the country.
“At the Budget, we will invest and level up to ensure the whole of the UK benefits as we unite our country and unleash our potential.”
