The number of people in Britain claiming jobless benefits had its biggest fall in more than 16 years last month but the jobless rate held steady, underscoring the Bank of England’s message that unemployment is likely to fall only slowly.

Data released on Wednesday also showed wages falling further behind inflation, something likely to be seized on by the opposition Labour party which has made living standards a central theme of its 2015 election campaign.

But there were signs that Britain’s economic recovery was feeding into the labour market, as the number of people claiming jobless benefits fell by a much bigger-than-expected 41,700 in September, the biggest monthly fall since June 1997.

August’s claimant count was also revised to show a drop of 41,600, a fall of 9,000 more than first reported, the Office for National Statistics said. The unemployment rate was 7.7 per cent in the June-August period, unchanged from May-July and in line with most forecasts in a Reuters poll.

The Bank of England, hoping to give Britain’s economic recovery a boost, said in August it will not consider raising interest rates before unemployment falls to seven per cent. The BoE forecasts that will not happen before the third quarter of 2016.

Investors largely expect unemployment to fall much faster and many have put money on a rate hike in early 2015.