SCOTLAND’S unemployment rate has fallen to its lowest level in a quarter of a century.

The headline jobless total fell from 19,000 to 104,000 in the last recent quarter, or from 4.5 to just 3.8 per cent.

The Office for National Statistics (ONS) said the drop between March and May took the Scottish unemployment rate to its lowest point since comparable records began in 1992.

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The numbers out of work across the UK fell by 64,000 to 1.49m, or from 4.7 to 4.5 per cent.

The number of people in work in Scotland also increased by 25,000 in the quarter to 2.62m, a 74.1 per cent employment rate, slightly less than the UK rate of 74.9 per cent.

It meant Scotland’s job market figures were back to where they were before the Crash, although wages last year were still 3 per cent lower in real terms than in 2008.

Business leaders welcomed the new numbers, but also sounded a note of caution, pointing out Scotland saw the biggest rise in economic inactivity of any UK region last year.

Economic inactivity, which includes students and people not actively seeking work, fell fractionally in the last quarter in Scotland, down 0.1 percentage points to 22.9 per cent.

However over the year, it rose by 40,000 or 1.2 percentage points.

In contrast, all other parts of the UK saw economic inactivity fall or remain static over the year, with the exception of Northern Ireland, where it rose by 0.7 percentage points.

Across the UK as a whole it fell slightly to 21.5 per cent.

SNP Economy Secretary Keith Brown said: “These figures show our labour market remains resilient and robust with unemployment at a record low. Our employment rate is also rising.

"When considered alongside last week's GDP stats showing Scotland's growth rate over the last quarter to be four times that of the UK, this is further evidence of the strength of the Scottish economy.

"Youth unemployment, which has fallen from 14 per cent since 2007 now stands at 8.4 per cent and continues to be amongst the lowest of all EU countries."

Liz Cameron, chief executive of the Scottish Chambers of Commerce, said the headline fall was “an outstanding achievement”, but said the full year changes were less encouraging.

She said: “Compared to this time last year, there are now 6,000 fewer people in employment in Scotland; whilst 40,000 more people are economically inactive.

“These numbers highlight the continuing challenge facing the Scottish economy at a time when businesses are seeking staff with the right skills to help them to succeed and grow.”

Colin Borland, from the Federation of Small Businesses, said: "Unemployment in Scotland is now very low indeed. Overall this is great news for firms and families.

"However some Scottish businesses are also reporting rising skills and labour shortages.

"As Brexit negotiations continue, it is even more important that no matter when they arrived, European nationals who work for or run businesses in Scotland must be allowed to stay.”

Professor Graeme Roy, Director of the Fraser of Allander Institute at Strathclyde University, said the 50 per cent fall in the number of unemployed Scots in the past four years was “remarkable given the sluggish performance of the Scottish economy” of late.

“However, some care still needs to be exercised when interpreting the sharp fall in unemployment just on its own.”

Tory MSP Dean Lockhart said: “We cannot escape the fact that much of this fall in unemployment can be attributed to a rise in those who are now economically inactive.

"That in itself is an issue of concern for the economy."

Labour’s Jackie Baillie added: “It is welcome to see some progress in the Scottish labour market, but there is no room for complacency from this nationalist government.

“A year-on-year increase of 40,000 people being economically inactive is deeply troubling.

“The SNP must get on with the job of fixing the mess it has made of our economy.”

Scottish LibDem Carolyn Caddick said: "Scottish ministers need to guard against complacency and deliver the support they promised. The SNP should not forget that the Scottish economy had a brush with recession at the start of the year."

UK Employment Minister Damian Hinds said: "These latest statistics are another reminder that our strong economy is giving record numbers of people the chance to find and stay in work."