The UK's unemployment rate dropped to 4.9% in the three months to February, according to the latest official figures.
The fall came as a surprise, with most analysts expecting the figure to hold steady at 5.2%.
But figures from the Office for National Statistics (ONS) revealed payrolled employment fell by 11,000 in March, the first data covering the period of the Iran war.
The ONS also reported that wages increased by 3.6% annually between December and February, making it the slowest growth since late 2020.
However, earnings are still rising faster than inflation.
The jobs market "showed signs of stabilising in February, but a reversal may be on the horizon", said Yael Selfin, Chief Economist at KPMG UK.
"Unemployment fell slightly to 4.9% in the three months to February, consistent with survey evidence suggesting hiring activity was recovering before the conflict in the Middle-East.
"However, unemployment is likely to trend higher in the coming months as firms scale back on hiring in response to rising costs and weaker demand."
FSTE100
The UK's flagship share index, the FTSE 100, was down 14 points at 10,611 shortly after opening this morning.
Brent crude oil futures were down 0.80% trading at $94.72 a barrel.
Companies reporting
- Associated British Foods* - Half Year Results
- BHP Group - Q3 Operations Update
- British Land* - Full Year Trading Statement
- IntegraFin Holdings - Q2 Trading Statement
- Jupiter Fund Management - Q1 Trading Statement
- Rio Tinto - Q1 Operations Update