Official: Average Earnings Outpace Inflation

Average UK earnings increased by 1.7% in the year to February, above the inflation rate of 1.6%, according to official figures.

The Office for National Statistics (ONS) said it was the first time since spring 2010 that the consumer price index for inflation had not exceeded pay increases.

It said pay increases averaged 2% in the private sector and 0.9% in the public sector.

It added the number of people out of work in the UK fell by 77,000 between December and February.

The unemployment rate of 6.9% is the lowest for five years.

Business Secretary Vince Cable said: "Throughout the economic crisis, and now in the recovery, our labour market has shown itself to be resilient and flexible.

"These latest employment figures show that conditions are continuing to improve rapidly."

The improving statistics have eroded Labour's stance on the economic policies at the heart of the coalition Government.

Sky News Economics Editor Ed Conway said: "There are likely to be quibbles with the data and the timing, and many of them are perfectly legitimate.

"What's less in doubt is that wages and inflation are converging meaningfully for the first time since 2010.

"That implies the squeeze on incomes is in the process of coming to an end."

He added: "By the same token, families have had to withstand a whole five-year period of falling real wages, so in real terms they remain significantly less well-off than they were before the crisis.

"That damage will take some years to mend."

The ONS said the total jobless in the period stood at 2.24 million, with a record 30.3 million people in work.

A total of 691,000 people have gained employment in the last year, taking the rate to 72.6%.

It added the number of people claiming Jobseeker's Allowance last month fell by 30,400 to 1.14 million.

Meanwhile, the number of people in Britain defined as economically inactive, including those caring for relatives or withdrawn from the job market, fell by 86,000 in the latest quarter to 8.8 million.

Those out of work for more than 12 months was also cut by 32,000, down to 807,000.

The jobless figure for 16 to 24-year-olds has also continued to fall, down by 38,000 to 881,000 - the lowest for five years.

The ONS said 1.42 million people are working part-time on the basis of not being able to find full-time employment.

It was a drop of 17,000 over the three months, although still 10,000 higher than the same time last year.

Esther McVey, the minister for employment, told Sky News: "More young people are in work, more women are in work, wages are going up and more and more businesses are hiring.

"It's a credit to them that Britain is working again."