While the statistics showed employment at a record high, a combination of stagnant wage growth and Tuesday’s higher than expected inflation figure suggests UK households will be hit with a fall in their real income.
Unemployment fell to just 4.6%, the lowest level since 1975, while the proportion of men and women aged 16 to 64 in work rose.
Royal London Asset Management’s economist Ian Kernohan said the data would have to improve if the forecasts of the Bank of England’s monetary policy committee are to be proven right.
He said: “Yet again, the missing ingredient in all this is a strong recovery in wage growth.
“Core average earnings, which exclude bonuses, were up by just 2.1% compared with a year earlier.
“With inflation now above target, real earnings growth has slipped into negative territory.
“The Bank of England’s MPC will need to see a distinct improvement in earnings growth, if their latest forecasts are to prove accurate.”
