Britain’s pay squeeze has intensified after wages growth fell further behind inflation, according to the latest official data.
Regular pay growth, excluding bonuses, slowed to 1.7% year on year in the three months to April, from 1.8% previously.
It was a much weaker than expected, with economists predicting 2% growth in pay.
With inflation running at 2.7% in April, the data from the Office for National Statistics signalled a further decline in living standards for UK households.
Philip Shaw, an economist at banking group Investec, said the gap between price rises and pay growth was likely to increase in the coming months. Inflation is expected to rise above 3%, after hitting a four-year high of 2.9% in May, as the drop in the value of the pound since the Brexit vote feeds through to higher shop prices.
“The erosion of real household income growth will set the tone for the economy as a whole as consumer spending slows in response,” Shaw said.
The UK unemployment rate was unchanged at a 42-year low of 4.6% in the three months to April, the ONS said.