Pay rises at fastest rate for more than three years

Rates are currently at 4.75%, but traders have bet on a cut to 4.5% in February, after inflation, which measures the rate prices rise at over time, unexpectedly fell last month.

Liz McKeown, director of economic statistics at the ONS, said pay growth had picked up for the second consecutive period, “again driven by strong increases in the private sector”.

Regular pay increased by an annual average of 5.6%, but when taking into account inflation, the real wage increase was 3.4%.