UK unemployment fell by 39,000 in the three-month period to February, figures from the Office for National Statistics have revealed.

According to the figures, unemployment now stands at 1.61m, while total employment has reached 29.5m, the highest level since records began in 1971.

But there are also signs that the credit crunch could be starting to affect the jobs market. While the number claiming jobseeker's allowance fell by 1,200 in March to its lowest point since 1975, it rose by 600 during February.

The manufacturing sector appears to be hardest hit, with 27,000 jobs going in the quarter to February. Employment in the sector is now at its lowest point since records began in 1978.