The official figures show that the amount of money workers are taking home continues to fall as inflation takes its toll.
Compared to the same period last year the average earnings in real terms are down by 0.6%.
According to the Office for National Statistics (ONS) the earnings rose by just 2.1% while the inflation was up to 2.7%.
There was good news in regard of employment with unemployment falling by 50,000 to 1.53 million in the 3 months to April. This is the lowest since the records begun in 1975. While the number of people in work rose to 74.8% again the best figure since records began in 1971.
However, the biggest issue for the economy will be the real term reduction on wages, especially since the ONS announced on Tuesday that inflation grew from 2.7% in April to 2.9% in May.
Samuel Tombs at Pantheon Macroeconomics called these figures as “astonishingly weak” and implied that real wages had fallen by 1.5% in April compared with the same month last year, which is the sharpest fall for three years.
John Hawksworth, chief economist at PwC, said: “With inflation likely to be heading above 3% later this year, the squeeze on real pay growth is now getting serious and is likely to dampen real consumer spending growth for some time to come.”
Analysts warned that future growth could be hit, as these figures wiped out sterling’s gains against the dollar.
Ben Brettell, senior economist at Hargreaves Lansdown, said: “The UK economy faces a dangerous cocktail of political uncertainty, slowing growth and shrinking real wages.
The ONS said that the number of job vacancies had also grown by more than 9,000 since February and there were 770,000 job vacancies in the March to May period.
However, the British Chambers of Commerce warned that the high employment levels coupled with high vacancies could worsen the workforce skills gap.