Families under further pressure as earnings growth slows

There’s more doom and gloom for households today as new figures reveal the first decline in real earnings since September 2014. According to the Office for National Statistics (ONS), earnings growth slowed in the three months to March, at 2.1 per cent, compared to previous data which showed wages, excluding bonuses, grew at 2.2 per cent. This compares to inflation which jumped to 2.7 per cent in April. Meanwhile, the unemployment rate dropped to 4.6 per cent in the three months to March, and is now at its lowest rate since 1975. It was previously 4.7 per cent. It means that 1.54 million people are currently unemployed. While some analysts say that the strength of employment is one reason to be optimistic that the slowdown in spending won’t be too severe, others are more pessimistic. Maike Currie, investment director for personal investing at Fidelity International, said: ‘With yesterday’s inflation figures showing CPI at 2.7 per cent and expected to rise even further, prices are likely to outpace wage growth, tightening the squeeze on UK households.