Wages rose at an annual rate of 2.9% in the three months to March, faster than inflation for the first time in more than a year, official figures show.
Over the same three-month period, the inflation rate was 2.7%.
Inflation started to overtake wages in February last year, squeezing incomes.
The Office for National Statistics (ONS) also said unemployment fell by 46,000 to 1.42 million, with the jobless rate falling to 4.2% the lowest since 1975.
The number of people in work increased by 197,000 in the January-to-March period to 32.3 million. The ONS said that 75.6% of people aged from 16 to 64 years were now in work, the highest since records began in 1971.
Despite the news of a pick-up in wage growth, the general secretary of the TUC, Frances O’Grady said: “Working people are still not getting a fair deal. Millions of jobs do not pay a real living wage. And average weekly pay is still worth much less than a decade ago.”
Senior ONS statistician Matt Hughes said: “With employment up again in the three months to March, the rate has hit a new record, with unemployment remaining at its lowest rate since 1975.
“The growth in employment is still being driven by UK nationals, with a slight drop over the past year in the number of foreign workers. It’s important to remember, though, that this isn’t a measure of migration.”
John Hawksworth, chief economist at PwC, said: “All of this good news stands in marked contrast to the subdued GDP growth of just 0.1% estimated for the first quarter.
“Overall, the continued robustness of the labour market may strengthen the hand of those arguing for interest rates to rise sooner rather than later.
“But the majority of the [Bank of England’s Monetary Policy Committee] will probably want to wait for hard evidence of output bouncing back in the second quarter before they pull the trigger on interest rates.”
Last week, the Bank of England kept interest rates on hold at 0.5%, saying the UK economy had hit a “temporary soft patch”.
Source: BBC News