Inflation has started to catch up with wage growth as average weekly earnings stall, according to the latest figures released on Wednesday.
Average weekly earnings including bonuses increased by 2.3 percent in March, the same as in the year to January. Inflation figures released on Tuesday showed the rate rise to 2.3 percent, above the Bank of England’s target, showing the two figures beginning to converge.
The UK unemployment rate has remained at 4.7 percent last month, with the number of people unemployed falling by 45,000 to 1.56 million in the three months to February, according to the figures from the Office for National Statistics.
Maike Currie, investment director for personal investing at Fidelity International, said the data showed a ‘cocktail of concerns’ for the British consumer:
“Taking yesterday’s inflation figures into account, pay growth has all but evaporated in the three months to February with workers’ total earnings including bonuses rising by 2.3 percent – the same number as UK consumer price inflation. Households are starting to feel the squeeze of rising prices and stagnant earnings just as the Brexit talks kick off.”
Sterling rose slightly against the dollar to $1.2521 after the figures were released and hit a 12-day high against the euro.