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Wages grow above inflation for first time in almost a year

Earnings are above inflation for the first time in almost a year. Credit: PA

Average earnings has increased by 2.8% in the three months to February, which is above inflation for the first time in almost a year, official figures show.

The latest Consumer Price Index inflation figure is 2.7% and is expected to remain unchanged when new figures are published on Wednesday, signalling an end to the squeeze on earnings.

Employment increased by 55,000 in the quarter to February to 32.2 million, the highest figure since records began in 1971, giving a record rate of 75.4%.

Unemployment in the same period fell by 16,000 to 1.42 million - the jobless rate of 4.2% is the lowest since 1975.

Matt Hughes, senior ONS statistician, 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 number of people classed as economically inactive, including students, those on long-term sick leave, on early retirement, or who have given up looking for work, fell by 2,000 to 8.7 million in the latest quarter.

Unemployment in the three months to February fell by 16,000 to 1.42 million. Credit: PA

The claimant count, which includes people on Jobseeker's Allowance and the unemployment element of Universal Credit, increased by 11,600 last month to 855,300, the highest for more than three years.

Job vacancies remained unchanged at 815,000, while the number of self-employed workers fell for the second successive quarter - down by 18,000 to 4.76 million.

Work and Pensions Secretary Esther McVey said: "Another milestone for employment has been reached under this Government as employment reaches a record high, up 3.2 million since 2010 - the 16th time the employment record has been broken in the same period."

TUC general secretary Frances O'Grady said: "Unions have negotiated pay rises for workers across the UK, from the counters at McDonald's to the factory floor at Ford.

"But wage growth is still weak. Workers are £14 a week worse off than they were in 2007 - with pay packets not expected to return to their pre-crisis level until 2025."