Wages higher than inflation for the first time in four years

Average pay increased by 1.7 per cent this year

Wages are rising ahead of inflation for the first time since the Coalition government took office, official figures showed this morning.

Average pay, including bonuses, increased by 1.7 per cent in the year to February, while the Consumer Price Index measurement of inflation stands at 1.6 per cent.

It was the first time for four years that salaries increases have exceeded price rises.

Labour has campaigned heavily on falling standards of living since 2010, arguing that the average working age person has become more than £1,600 worse off over the period.

Separate figures showed that unemployment dropped to 2.24m in February, a jobless rate of 6.9 per cent, which is the lowest for five years.

Esther McVey, the employment minister, said: “More young people are in work, more women are in work, wages are going up, and more and more businesses are hiring - and it’s a credit to them that Britain is working again.”

The Office for National Statistics reported that pay rose by an average of 2 per cent in private firms and by 0.9 per cent in the public sector.

Average total pay is £479 a week, or £449 excluding bonuses.

Rachel Reeves, the shadow Work and Pensions Secretary, said: “ Most people are not feeling any recovery and the link between the wealth of the nation and family finances remains broken.

“It’s deeply complacent and out-of-touch for the Tories to try and claim this deep-seated cost-of-living crisis has suddenly been solved.”