Earnings match inflation in four-year first
Workers' wages have caught up with inflation for the first time since 2010.
Figures released today by the Office for National Statistics (ONS) revealed average UK earnings, including bonuses, grew by 1.7% in the year to February.
The Consumer Prices Index (CPI) inflation rate also stood at 1.7% in February and fell to 1.6% in March, meaning that wages have matched inflation for the first time in four years.
The figures can be seen as a key marker for the economy, with wages struggling to outstrip the cost of living since the 2008 financial crisis.
And in further good news for the economy, the UK's unemployment rate has fallen to 6.9%, its lowest level in five years.
The ONS revealed the number of people out of work has fallen by 77,000 to 2.24 million in the three months to February, with a record 33 million people now in work.
A total of 691,000 people have found employment in the past year, with the employment rate now standing at 72.6%
This has been welcomed by Chancellor George Osborne. "These strong jobs numbers are very good news," he said
"Coming alongside yesterday's lower inflation, they are compelling evidence that our economic plan is working. There are now a record number of jobs in Britain - and today we have taken a further step in meeting the ambition I have set for full employment. Every job created means another family with greater economic security and the prospect of a brighter future."
However, he admitted there is still a way to go: "These remain difficult times for families facing pressures on their budgets, and much work needs still to be done to build a resilient economy.
"But today's news supports the argument we have made all along that the only way to see rising living standards is to grow the economy."
An increase in the general level of prices that persists over a period of time. The inflation rate is a measure of the average change over a period, usually 12 months. If inflation is up 4%, this means the price of products and services is 4% higher than a year earlier, requiring we spend and extra 4% to buy the same things we bought 12 months ago and that any savings and investments must generate 4% (after any taxes) to keep pace with inflation. Since 2003, the Bank of England has used the consumer prices index (CPI) as its official measure of inflation (see also retail prices index).
The Consumer Price Index is the official measure of inflation adopted by the government to set its target. When commentators refer to changes in inflation, they’re actually referring to the CPI. In the June 2010 Budget, Chancellor announced the government’s intention to also use the CPI for the price indexation of benefits, tax credits and public sector pensions from April 2011. (See also Retail Prices Index).