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Around 1,600 people have found work every day for the past year, plunging unemployment to a near seven-year low, new figures have shown.

The jobless total dipped by 97,000 in the quarter to last December to 1.86 million, almost half a million down on a year ago, while employment increased by 103,000 to almost 31 million, the highest since records began in 1971.

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The number of people claiming jobseeker's allowance was cut by 38,600 in January to 823,000, the 27th consecutive monthly fall and the lowest since the summer of 2008.

The UK now has the third lowest unemployment rate in the European Union at 5.7%, behind Austria (4.9%) and Germany (4.8%), according to data from the Office for National Statistics (ONS).

Pay continued to rise ahead of inflation, with average earnings increasing by 2.1% in the year to December, 0.3% up on the previous month.

CPI inflation was 0.5% in December.

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Other figures from the Office for National Statistics showed that non-UK nationals working in the UK increased by 239,000 to almost three million at the end of last year compared to 12 months earlier.

The total counted around 1.9 million EU nationals, including 172,000 people from Romania and Bulgaria, down by 17,000 on the quarter to September.

Long-term unemployment fell by 210,000 for those out of work for over a year, to 638,000, but there was a 3,000 increase in youth unemployment.

Self-employment was down by 19,000 over the latest quarter to 4.5 million, around 14% of total employment.

The number of people in part-time jobs wanting full-time work is also down, by 28,000 to 1.3 million.

But people classed as economically inactive, including those on long-term sick leave, looking after a relative or who have given up looking for work, increased by 22,000 to more than nine million.

Work and Pensions Secretary Iain Duncan Smith said: "With unemployment continuing to fall, wages rising, and a record number of people in work, it's clear that the Government's long-term economic plan to get the country back on track is working.

"The jobs-led recovery is changing people's lives for the better on a daily basis. We are getting people into work, making work pay, and in so doing we are ensuring a better future for Britain."

Shadow employment minister Stephen Timms said: "Today's fall in overall unemployment is welcome but five years of the Tories' failing plan has left working people £1,600 a year worse off since 2010. Low pay has left millions of working families struggling to make ends meet and has led to billions more spent on the housing benefit bill."

Mr Timms said it was "extremely worrying" that youth unemployment had increased.

Speaking to workers at a Rolls-Royce plant in West Sussex, Prime Minister David Cameron said: "We inherited a situation where far too many people were unemployed, where we weren't creating enough jobs in our country.

"Since I became Prime Minister, we haven't solved or tackled all of unemployment, but we have got 1.85 million more people in work today than when I became Prime Minister

"I sit round that European Union council table with the 27 other countries - I was there last week. Britain, in the last four years, has created more jobs than the rest of Europe put together, so we are on our way."

Employment minister Esther McVey told the Press Association that the increase in youth unemployment was a "tiny blip", with all the trends showing falling joblessness and increased employment.

Three out of four jobs created over the past year were full-time, mainly for managerial, professional and skilled posts, she said.

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Youth unemployment had fallen since the coalition came to power, a record number of women were in work, and job vacancies had reached a record 720,000, she added.

"Around 1,600 people have been finding a job every day over the past year," she said.

TUC general secretary Frances O'Grady said: "At the current rate of progress it will take until at least the end of the next parliament just for wages to recover their lost value. There is still a long way to go before we see a full labour market recovery.

"The failure to make progress on youth unemployment is a big concern. The Government seems to have given up, with the Conservatives suggesting young people should be forced into zero-pay workfare instead of fair pay jobs."

John Cridland, director general of the CBI, said: "The recovery is now established and businesses are continuing to create more full-time jobs.

"While it's good to see unemployment falling we still need to see more young people finding roles, especially those that help them develop their skills and progress up the earnings ladder.

"Pay growth is now well ahead of inflation, and a focus on improving productivity from businesses will help keep this on track."

Other figures showed there has been a 2.7% rise in the number of disabled people in work over the past year, although the figure fell slightly for the latest quarter.

Richard Hawkes, chief executive of the disability charity Scope, said: "The gap between the employment rate of disabled people and the rest of the population is around 30% and has remained largely static for the last decade.

"In 2015 too many disabled people remain locked out of the workplace. Nine in 10 disabled people have worked at some point, but under half are in work now.

"This is a waste of the talents of disabled people, who are a vital and often untapped resource for the UK labour market. All political parties need to commit to closing this gap."