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Pay rising faster than inflation as Bank warns on growth

Average earnings are rising faster than the rate of inflation after years of falling living standards, new figures show.

The Office for National Statistics data came as Mark Carney, the Governor of the Bank of England (BoE) said inflation is more than likely to fall below 1%, and economic growth will be slower than previously expected.

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Interest rate change not expected until next Autumn

Projections in the Bank of England's quarterly inflation report are likely to cement expectations that interest rates will not rise until well into next year.

Bank of England Governor Mark Carney. Credit: Stefan Rousseau/PA Wire

After the cuts in growth and inflation projections the BoE is expected to leave the interest rate at the long-term low of 0.5%.

"What really matters is the broad process of monetary policy, not a specific date for the first interest rate rise", Governor Mark Carney said

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