The number of people in work has reached a record high of almost 30 million, according to figures released by the Office of National Statistics.
Average earnings increased by 0.7% in the year to September, 0.1% down on the previous month.
David Cameron says his economic plan is "on track" despite a Bank of England admission that interest rates could rise sooner than expected.
Today's growth forecast may seem to be good news for the Coalition, but the increasing cost of living could cause problems at the polls.
Most borrowers are not economists. Deciding whether they can afford to borrow has just become more difficult.