Wages grow at slowest speed ever recorded

Ben Southwood
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AVERAGE weekly earnings grew at their slowest pace since records began in the three months to February, official data showed yesterday.

Before inflation, regular pay was only one per cent higher in the three months up to and including February 2013 than it was in the same period a year before, according to figures from the Office for National Statistics.

Total pay was up only 0.8 per cent – and for the private sector this was just 0.5 per cent, in a period when inflation averaged 2.7 per cent. By contrast the average public sector worker saw their wage grow 1.7 per cent – more than three times faster.

After inflation, wages were down 1.7 per cent across the whole economy, in the latest period of the continuous fall in real wages hitting earners since 2009.

These four years of continuous real wage declines have seen weekly pay fall 7.5 per cent – continuing to fall throughout the post-recession recovery period.

Though this ongoing squeeze has cut into in-work households’ spending power, economists also see it as one of the main reasons the labour market has – so far – held up relatively well, compared to the unbroken gloom in the rest of the UK economy.