Wages are rising faster than inflation for the first time in six yearsAfter nearly six years of falling real wages, weekly earnings have finally edged above inflation.
Weekly wages, including bonuses, rose by 1.7% in the year to February, up from 1.4% in January, according to the Office for National Statistics (ONS).
Earlier this week, inflation, as measured by the Consumer Prices Index (CPI), fell to 1.6%.
It is the first time that earnings have been higher than inflation for six years, apart from two months in 2010.
However, when bonus payments are excluded from the figures, wages rose by 1.4%, still below the rate of inflation.
The latest figures for wages measure the three months to February. At that time CPI was at 1.7%.
Other statistics from the ONS show how inflation has eroded the value of pay over the last six years.
While earnings rose by 8.6% since July 2008, prices rose by 16.9%.
Public sector
Although the figures suggest that people's purchasing power is now improving, it will be several years yet before real wages are back to the level they were before the financial crisis.
The Office for Budget Responsibility (OBR) has estimated that real incomes will not return to their 2009-10 levels until 2018 at the earliest.
And since the start of the financial crisis, real pay has fallen by a "colossal" 10%, according to Capital Economics.
That is said to be the biggest fall in any five-year period since the 1920s.
However, the government has said that all but the top 10% of earners are already seeing their incomes rise, once tax cuts are taken into consideration.
David Freeman from the Office for National Statistics says average pay rises are outstripping the rate of inflation for the first time in four years
The latest figures for average wage rises also conceal a marked divide between workers in the public and private sectors.
Those in the private sector are now enjoying average annual rises of 2%, including bonuses.
By contrast, those in the public sector are only seeing rises of 0.9%.
This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read the FAQ at fivefilters.org/content-only/faq.php#publishers.
