Eurozone unemployment has fallen to a three and a half year low of 10.9% in July, as the recovery in the single currency trading bloc continues to boost jobs.

The drop in unemployment surprised economists, who had been forecasting no change from the 11.1% of unemployment seen in June, writes Joel Lewin in the Financial Times.

The number of people unemployed fell 232,000 from June in the EU and by 213,000 in the Eurozone, according to Eurostat.

The drop in unemployment comes after data from the Markit Eurozone manufacturing purchasing managers’ index (PMI) showed the manufacturing sector continued to expand in August, although it follows disappointing second quarter GDP data that showed the eurozone's largest economies grew less than economists had expected.

The lowest rates of unemployment in the EU were 4.7% in Germany and 5.1% in the Czech Republic and Malta.

Meanwhile the highest rates of unemployment were 25% in Greece and 22.2% in Spain.

Compared with a year ago, the rate of unemployment in July 2015 dropped in 23 EU member states, rose in three and remained stable in Belgium and Romania.

Bulgaria clocked the biggest fall- 11.5% to 9.4 per cent, followed by Spain, where unemployment fell from 24.3% to 22.2% and Greece, where the rate dropped from 27% to 25% .

The only three countries to clock a rise in unemployment were France, where it rose from 10.3 to 10.4 per cent; Finland, where unemployment climbed from 8.7% to 9.7% per cent; and Austria, where it rose from 5.7% to 5.8%.