Unemployment continued to fall last month with a record number of people now in work, new figures have shown.

Office for National Statistics date released on Wednesday showed the claimant count falling for the 12th month in a row.

The 2,800 fall in those claiming jobseeker's allowance in September took the figure to a two-year low of 835,800.

The total number of people in work also reached 29.1 million, the highest level since comparable records began in 1971.

However the number of those classed as economically inactive - not in work, education or training - also hit a record high of 7.97 million after an increase of 41,000 in the third quarter of the year.

And the number of manufacturing jobs continued to fall, down by 42,000 in the three months to August compared with the previous year to 2.95 million, the lowest on record.

Employment minister Caroline Flint said there were more vacancies in the economy, meaning "those who are able to work can find a job".

"There is no doubt that work is the best route out of poverty," she said. "But too often people forget the range of benefits which work can bring, from more money to better health and increased self-confidence," she said.

"The challenge for us is to find new ways of helping people develop the skills and confidence they need to take advantage of these opportunities."

On those out of work, Flint said there are now over 100 major companies in the local employment partnership scheme (LEP), pledging to take on and train new staff.

"The companies involved in LEPs have shown their commitment to British workers and we will give people the support they need to get into work," she said.

"I believe this can play a huge part in tackling the legacy of worklessness that still exists in our towns and cities.

"Our strong and stable economy has helped deliver record numbers in work and, with unemployment continuing to fall, we have in our sights the ambition of reaching full employment within a generation."

TUC general secretary Brendan Barber hailed the figures, although he also raised concerns over manufacturing and pay.

"This was another strong month for jobs and employment, and a strong testament to the underlying strength of the UK economy," he said.

"But the continuing decline in manufacturing jobs should ring alarm bells. The UK needs a balanced economy.

"The gap between public and private pay increases is storing up trouble. Not only will it hit morale in vital public services, but ministers should remember that a key ingredient in the decline of quality public services under the last government was an institutionalised public/private pay gap."