THE number of people out of work and claiming benefit is at a 20-year low, official figures showed yesterday.

Figures from the Office for National Statistics (ONS) also showed wages growth declining when compared with last year.

The double dose of good economic news was a boost to the beleagured Government, which combined with yesterday's figures showing falling inflation, provided a welcome fillip for Prime Minister Tony Blair.

The latest figures also showed the largest rises in employment were recorded in the North-East.

The ONS said the number of people out of work and claiming benefit last month fell by 18,000 to stand at 1,051,300 the lowest level since December 1979.

Average earnings increased by 3.9 per cent in the year to July, but were down by 0.2 per cent on the previous month, it added.

And the International Labour Organisation jobless total which includes people not on benefit fell by 104,000 between May and July to 1,580,000 a rate of 5.3 per cent, down by 0.3 per cent on a year ago, said the ONS.

The number of people unemployed has fallen on average by 19,500 a month for the past three months and 17,500 a month over the past six months.

The total number of people in work estimated at 27,966,000 for the period May to July is the highest since 1984, when the ONS started keeping records.

But there were worries about the continuing pressure on manufacturers, which have been squeezed by the strength of the pound against the euro.

The number of manufacturing jobs fell by tow per cent in the three months to July compared with the same period last year, to stand at 3,956,000, according to the ONS figures.

The largest falls were seen in the leather and textile industries.And manufacturing productivity for the three months to July,was down 0.3 per cent on last month