The unemployment rate fell to 4.6 percent, according to the Office for National Statistics, with the number of people unemployed falling by 53,000 to 1.54 million in the three months to March.
It said the jobless rate dropped to 4.6 percent in line with the calculation criteria set by the International Labor Organization (ILO), marking the lowest level in nearly 42 years.
"With yesterday's inflation figures showing CPI at 2.7 percent and expected to rise even further, prices are likely to outpace wage growth, tightening the squeeze on United Kingdom households".
The number of workers in Britain from the other 27 European Union countries rose by 50,000 to just under 2.34 million in the first three months of 2017.More news: Comey Hid Among White House Curtains to Avoid Trump
That meant regular pay, when adjusted for inflation, fell by 0.2 percent in the first three months of the year, the first fall since the third quarter of 2014.
One in every eight workers in the United Kingdom - 3.8 million people - is now living in poverty, according to a report written for the independent Joseph Rowntree Foundation by the New Policy Institute.
British households are facing an ever-tighter squeeze on their spending power experts have warned as evidence mounted today that prices are rising faster than incomes.
Unemployment fell to just 4.6%, the lowest level since 1975, while the proportion of men and women aged 16 to 64 in work rose.More news: WikiLeaks awaits UK decision on Assange's status
In a summary of business conditions for May, the Bank said consumer goods price inflation "had picked up markedly".
"An astonishing rise in United Kingdom employment isn't enough to mask the fall in real wages", said ING bank economist James Smith.
The BoE said on Wednesday there was little sign that companies planned to raise annual pay awards above the 2.0-2.5 percent level of recent quarters.
Andrew Hood, senior research economist at the Institute for Fiscal Studies, said: "The big change compared with a year ago is not weaker growth in people's cash earnings but higher inflation".More news: United Nations chief condemns North Korea over missile launch
Data on Tuesday revealed Consumer Prices Index (CPI) inflation jumped to 2.7% in April - up from 2.3% in March and the highest level in almost four years. "The pay data indicate a collapse in wage settlements in the construction industry, and this is significant because much of the employment growth in the last part of 2016 came from that sector".
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