Unemployment fell by 7,000 between May and July to 2.59 million, official figures have shown.
The number of people claiming jobseeker's allowance last month fell by 15,000 to 1.57 million, said the Office for National Statistics.
Average earnings increased by 1.5% in the year to July, 0.3% down on the previous month.
The Olympics is thought to have helped drive a further fall in UK unemployment after another leap in the number of people in work.
London accounted for 5,500 of the fall in the so-called claimant count, suggesting a jobs boost from the London Games.
The number of people in work increased by 236,000 to 29.6 million, which is the largest quarterly rise for two years.
The ONS said the Games was likely to have been a driving factor behind the jump in employment, with London accounting for 91,000 of the rise.
However the number of unemployed disabled people has risen, casting an unwelcome tarnish over the Paralympics.
David Weir, MBE has won a total of six gold medals at the 2008 and 2012 Paralympic Games. Amid jubilation over the paralympics, there has been a rise in disabled people being unemployed
Another caveat can be added to the figures, with the number of part-time workers increasing by 134,000 to reach 8.12 million - the highest since records began in 1992.
The number of Britons working part-time because they could not find a full-time job also hit a record high of 1.42 million.
The ONS also revealed that public sector employment fell for the eleventh quarter in a row, by 235,000 to 5.7 million.
Unison general secretary Dave Prentis called on the government to provide a long term plan of job creation to help ease the UK’s economic woes.
He said:“For families suffering the misery of unemployment, any decrease will be welcome news, but it is clear when you look at the bigger economic picture that any talk of growth is premature.
“In areas such as Yorkshire and Humberside, and the West Midlands – where unemployment is already among the highest in the UK – unemployment continues to go up, meaning yet more misery for families struggling to get by.
“The summer of sport and the ‘Olympic effect’ will have contributed to some small increases in employment, as will the rise in part-time working. But many people work part time because they have no other choice, and without a long term plan of job creation – especially for our young people – unemployment will remain a blight on our society.”