Unemployment fell to 7.1% in the three months to November, official statistics have shown, but the Bank of England has warned against any sharp rise in interest rates.

The Bank of England Figures from the Office for National Statistics show the number of people out of work fell 167,000 to 2.32m during the September to November period.

This fall means the unemployment rate is closing in on Bank of England governor Mark Carney’s target of 7%.

Carney issued forward guidance last year which said the central bank would consider increasing the Bank Rate when unemployment falls to that level.

While Carney has stressed 7% was a ‘threshold not a trigger’ the rapid fall in unemployment raises the scope of interest rates rising sooner than expected and several mortgage lenders have already increased rates on long-term fixed rate products.

However, minutes from the latest Bank of England Monetary Policy Committee show the central bank is not planning any rate rise in the immediate future and that any changes would take place slowly.

“Members therefore saw no immediate need to raise Bank Rate even if the 7% unemployment threshold were to be reached in the near future,” it said.

“Consequently when the time did come to raise Bank Rate, it would be appropriate to do so only gradually.”