Wage growth rose to 2.8% in the three months to February, outstripping inflation for the first time in a year, official figures show.
The figures from the Office for National Statistics (ONS) signal an end to the squeeze on household incomes after the slump in the pound following the Brexit vote drove the cost of living higher.
Inflation had topped 3% in recent months but more recently has eased, meaning that according to the latest figures wages, stripping out bonuses, are now growing in real terms by 0.2% – the first positive reading since the three months to January 2017.
There was a further boost from the official labour market statistics as the unemployment rate fell to a fresh 43-year low of 4.2% and the jobless total dropped by 16,000 – reversing rises in the number seen over the previous couple of months.
The employment rate also notched up a new record high, at 75.4%, as the number of people in work rose by 55,000 to 32.26 million, according to the ONS.
Stephen Clarke, senior economic analyst at the Resolution Foundation, said: “Today’s figures confirm that Britain passed an important living standards milestone in early 2018 as its 12-month pay squeeze finally ended.
“Wages should continue to strengthen over the course of the year as inflation falls back.”
The latest wage growth figure of 2.8% means that over the three-month period, pay increased at a faster pace than the ONS’s preferred CPIH measure of inflation, which includes housing costs.
However, inflation over the period using a slightly different measure preferred by the Bank of England – CPI – was an average 2.9%, still slightly ahead of wage increases.
Senior ONS statistician Matt Hughes said: “The labour market continues to be strong, and for the first time in almost a year, earnings have grown slightly after inflation has been taken into account.”
The ONS will publish March’s inflation figures on Wednesday. They are expected to show CPI steady at 2.7%.
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From – SkyNews
