British employers added more workers to their payrolls in October after the government's job-protecting furlough scheme ended.
This should potentially ease the lingering concerns at the Bank of England about the risks of raising interest rates.
Sterling rose as data showed the number of employees on company payrolls rose by 160,000 to 29.3 million employees last month and the unemployment rate in the third quarter fell by more than expected.
The Bank of England, weighing up when to raise interest rates, is watching closely for how the labour market holds up after the scheme expired, with an estimated 1.1 million people still on it in its final days.
The Office for National Statistics said it was possible that people made redundant at the end of the scheme would continue to appear as in work in the data for a few more months, while they worked out their notice period.
"However, responses to our business survey suggest that the numbers made redundant was likely to be a small share of those still on furlough at the end of September 2021," the ONS said.
Separate official data published today showed the unemployment rate fell to 4.3% in the three months to September.
Economists polled by Reuters had expected the unemployment rate to fall to 4.4% from 4.5% in the three months to August.