Claims for jobless benefits declined 15,200 to 1.61 million, the Office for National Statistics said. A broader measure of unemployment showed the first quarterly fall in 18 months.
The figures will help Prime Minister Gordon Brown, who is trailing in opinion polls with a general election due by June. While employment levels are stabilizing, companies may be reluctant to start hiring again as the economy struggles to shake off the slump.
Based on International Labour Organization methods, unemployment fell 7,000 in the three months through November to 2.46 million. That was the first quarterly decline since March- May 2008.
The number of people in work declined 14,000 to 28.9 million, with part-time employment offsetting a drop in full- time work. Job vacancies in the fourth quarter rose by 16,000.
In November, the number of jobless claims fell by 10,800 instead of the 6,300 originally reported. Claims last fell for two straight months in early 2008. In December, the claimant-count rate was unchanged at 5 percent.
Unemployment has risen by less than officials initially predicted as companies froze pay and cut working hours to retain labor needed once the economy returns to growth.
At 7.8 percent, the U.K. jobless rate is below the 10 percent figure in the U.S. and the euro region. Many economists expect it to peak below 10 percent, compared with the postwar high of 11.9 percent recorded in 1984.
While the economy probably escaped the recession in the fourth quarter, the pace of recovery is likely to be muted and companies will increase working hours before they start hiring, economists say.
Six consecutive quarters of economic contraction has destroyed more than half a million jobs in the U.K., with the ax falling hardest on the young. Almost 20 percent of people age 16 to 24 were without work in the three months through November and the number of people unemployed for more than 12 months climbed to the highest level since 1997.
Job losses have suppressed pay pressures in the economy. New figures published by the statistics office today show average weekly pay grew 0.7 percent in the three months through November to 451 pounds. Regular pay increased 1.1 percent and bonuses fell 9 percent, with bonuses in the finance and business services sector dropping 10.8 percent.
Average earnings expanded 1.6 percent in the period through November, with earnings excluding bonuses growing at the same pace.