George Osborne has received a well-timed political boost as the latest official figures show that the number of people out of work fell by 63,000 to 2.33 million.
The latest figures from the Office for National Statistics showed that the number of people in work was up 105,000 for November 2013 to January 2014, bringing it to 30.19 million.
However, the ONS warned that the increase in unemployment was due to more self-employed people, as the number of employees actually fell over the same period.
"Unemployment continued to fall, as did the number of economically inactive people aged from 16 to 64. These changes continue the general direction of movement over the past two years," the ONS noted.
Pay including bonuses was 1.4% higher than a year earlier, with it still being eaten away by inflation. However, the gap was at its lowest level in 18 months, in a sign that the cost of living crisis may be easing.
John Salt, director of totaljobs.com, said: “Today’s job figures are a morale boost for the government ahead of today’s Budget speech. The Chancellor will need to explain that cuts to vital skills funding and a lack of investment in the public sector will not threaten the future of the recovery.
"The Budget needs to show clear incentives for businesses to invest in people. It remains to be seen whether plans for a new garden city and investment in infrastructure will create the jobs needed to secure a long term economic recovery, or whether these plans simply constitute electioneering from the Conservatives."