Living standards 'squeeze' concerns raised as jobless total hits 42-year low
Workers are facing a living standards "squeeze" as wage rises fall below inflation despite record numbers in work, the Government is being warned.
Union and business leaders issued similar comments on the prospects for household earnings as official figures showed wages rose at a slower pace than inflation for the first time in two-and-a-half years.
The Office for National Statistics (ONS) said wages excluding bonuses went up by 2.1% in the three months to March, while average weekly earnings in real terms - adjusted for inflation - fell by 0.2%.
This is the first fall since the third quarter of 2014.
Alpesh Paleja, the CBI's principal economist, said: "W eakening productivity and slower pay growth, coupled with rising inflation, will continue to squeeze real household earnings."
TUC general secretary Frances O'Grady said: "Today's fall in real wages risks tipping working people into another living standards crisis, and that poses a major challenge for whoever forms the next government.
"The big question for every party is - what's your plan to get Britain's wages rising again?"
The prospects for wages overshadowed another set of jobs figures, showing that the UK's unemployment rate has fallen to a 42-year low, with a record number of people in work.
The jobless total fell by 53,000 to 1.54 million in the quarter to March, a rate of 4.6%, the lowest since summer 1975.
Employment has increased by 122,000 to almost 32 million, the highest since records began in 1971, reported the ONS.
Other figures showed:
:: Output per hour, the UK's main measure of labour productivity, fell by 0.5% in the first quarter of the year.
:: The number of people on the claimant count rose by 19,400 to 792,800, mainly because of an increase in those on Universal Credit.
:: The number of people classed as economically inactive fell by 40,000 in the latest quarter to 8.8 million, the lowest for a year.
:: The rate of economic inactivity was 21.5% of all 16 to 64-year-olds, the lowest on record. The total includes people looking after a relative, on sick leave or who have given up looking for a job.
:: The number of non-UK nationals working in this country increased by 207,000 to a record 3.5 million between January and March. The number was 928,000 in 1997, and the proportion of non-UK nationals rose from 3.5% to 11.1% over the same period.
:: The number of job vacancies in the UK has reached a record high of 777,000 after a 22,000 increase in the quarter to March.
:: Self-employment has continued to increase - up by 82,000 to a near record 4.78 million, 15% of all people in work.
:: Unpaid family workers increased by 15,000 to 117,000.
At a press conference in London, Prime Minister Theresa May said: "Today's employment figures show that our credible economic policies are continuing to deliver greater economic security for families across the country."
Campbell Robb, chief executive of the Joseph Rowntree Foundation, said: "It is encouraging that employment continues to rise and has reached another record high, but even people who are in work are facing a tough time to make ends meet as a living standards squeeze takes hold."