THE PAY squeeze was officially over today as wage hikes finally topped inflation â and the number of people in work hit a new record.
Job figures showed average earnings in the three months to the end of February were 2.8 per cent higher than the previous year, while inflation in February fell to 2.7 per cent.
Campaigners said it marked the first in over a year that ârealâ incomes had gone up â but warned the milestone could force the Bank of England to put up interest rates next month.
Employment hit a new record high â and unemployment a new 39 year-low.
Stephen Clarke, senior economic analyst at Resolution, said: âTodayâs figures confirm that Britain passed an important living standards milestone in early 2018 as its 12-month pay squeeze finally ended.
âWages should continue to strengthen over the course of the year as inflation falls back.â
Ruth Gregory, UK economist at Capital Economics, said: âPay growth appears to be finally benefiting from the strength of jobs growth.
âWe think that the Bank of Englandâs Monetary Policy Committee will judge that the upside news on pay growth and inflation cancels out the recent soft activity data.â
The job figures separately revealed a new record high for employment â with the number of people in work leaping 55,000 to 32.26 million in February.
The employment rate hit a new record of 75.4 per cent â the highest since comparable records began nearly 40 years ago.
A staggering 71 per cent of all working age women are now in job.
Of a 427,000 rise in employment over the past year, more than half of the increase came amid the over 50s as more âpensionersâ put off retirement.