The Office for National Statistics said the number of people claiming unemployment benefit fell by 3,700 in October confounding expectations for a rise of 5,000. There was also a downward revision to September’s rise in the claimant count — to 1,300 from the 5,300 initially reported.

The number without a job on the wider ILO measure, which includes those looking for work but not claiming benefits, also declined, falling by 9,000 in the three months to September to 2.448 million.

The pound rose after the figures, which were released at the same time as minutes showed Bank of England policymakers split three ways at their policy meeting earlier this month.

“A fairly positive tone on the labor report,” said Alan Clarke, an economist at BNP Paribas. “It’s slightly better-than-expected news.”

The jobless rate remained steady at 7.7 percent, as expected, matching its lowest rate since May 2009. Employment rose by 167,000 to 29.19 million, its highest total since February 2009.

While the figures suggest Britain’s labor market has recovered somewhat from the soft patch experienced at the start of the summer, analysts said painful government cuts could cause the jobless rate to rise in the coming months.

Britain’s government will cut 490,000 public sector jobs over the next four years as part of an austerity drive aimed at cutting a record peacetime budget deficit.

Finance minister George Osborne is banking on the private sector creating extra posts to help make up for the loss of state jobs.

“Major job losses are on the way in the public sector as the government slashes spending, and we doubt that the private sector will be able to fully compensate for this,” said Howard Archer, an economist at IHS Global Insight.

Wage growth picked up from recent low levels but remained below inflation. Consumer price inflation rose to 3.2 percent in September, more than a percentage point above the Bank of England’s 2 percent target, while retail price inflation is running even higher at 4.5 percent.

Average weekly earnings excluding bonuses rose an annual 2.2 percent in the three months to September, the fastest rate since the three months to March 2009.

“With plenty of spare capacity and major public sector job cuts to come, the labor market should be a strong source of downward pressure on inflation over the coming quarters,” said Jonathan Loynes at Capital Economics.