A boost in household spending power has been revealed as basic wage growth in July outstripped the rate of inflation for the first time in more than 18 months, according to official figures.
The latest employment data from the Office for National Statistics (ONS) showed that wages, excluding the effects of bonuses, were up 7.8% compared to the same month a year ago.
While that figure, a 22-year high, was static on the previous month, it was ahead of the consumer price index (CPI) measure of inflation for July which had eased sharply to 6.8%, reflecting a sharp fall in the energy price cap.
It means, on paper at least, that salaries are now outpacing the rate of price growth in the economy but it will not feel that way for millions of families whose budgets have hit breaking point during the energy-driven cost of living crisis to date.
The ONS report also showed that the UK’s unemployment rate rose from 4.2% to 4.3%.