Unemployment in the U.K. has fallen to its lowest level since October 2005, buoying Britain's Conservative government as it imposes its austerity-led agenda.

The Office of National Statistics said Wednesday the unemployment rate dropped in the three months ending in November 2015 from 5.8 percent to 5.1 percent compared to a year earlier. Wages growth was weak, increasing by only 2 percent.

UniCredit's chief U.K. economist Daniel Vernazza says the report offered "contrasting signals," with wage weakness making it unlikely that Bank of England policymakers will shift course and raise interest rates from their record low level of 0.5 percent.

Bank of England Gov. Mark Carney made clear Tuesday he saw no reason to raise rates now, particularly given the volatility in China and muted inflation.