US Edition The figures are the latest sign that rising inflation is squeezing workers' standard of living, even though the recession has officially ended.
Average wage rises have increased by just 0.1 per cent to 1.9 per cent, according to a respected monthly survey from Incomes Data Services (IDS). The study compared the three month period to the end of February with the three month period to the end of March.
This average rise of 1.9 per cent is well below the rise in the cost of living, which hit 3.4 per cent during March according to the Consumer Prices Index, as the price of petrol jumped and food bills remained stubbornly high. This suggests that in real terms workers are, in effect, suffering from a pay cut.
John Philpott, chief economist at the Chartered Institute of Personnel and Development and leading employment expert, said: "Consumers may not notice it for a while if their pay has gone up in nominal terms. But when inflation outstrips wage growth it has a depressing effect, not just on the economy but on families as well. It affects consumers' sense of well being and their willingness to spend."
On top of this, around 31 per cent of pay settlements agreed during the three months to the end of March involved a pay freeze. This was only a small improvement on the 34 per cent in the three months to the end of February.
The research comes just a day after data from the Organisation for Economic Co-operation and Development indicated that inflation in the UK was running at nearly twice the European Union average and three times higher than in France.
A separate study from the think tank CEBR last week suggested that the average UK family was £2 a week worse off in March 2010 than a year ago, with just £153 of disposable income a week left after paying their key bills, because most people's costs are rising faster than any salary increases. The biggest headache for many families has been the dramatic increase in petrol, which the AA said rose by 28 per cent in March alone. A litre of unleaded now costs 121.3p on average across Britain.
Uncertainty surrounding the general election has also led some bosses to defer making any decisions about their staff's pay, one expert suggested.
The well respected IDS monthly survey also suggested that the pay freezes that have swept the private sector for the last 18 months are starting to hit the pockets of public sector workers – a sign, economists say, of things to come as any incoming Government will be forced to cut the public sector wage bill.
Over half of the pay freezes that took place in April were ones that hit public sector workers. For example, 115,000 consultants, GPs and dentists covered by the NHS Doctors and Dentists Review Body had their pay frozen for 12 months from 1 April 2010.
Ken Mulkearn of IDS said: "We are seeing a slow recovery in private sector pay awards.
"However, settlement levels are still lagging behind inflation which means that real-terms wage growth remains weak for most workers, and the picture is even worse in the public sector, where restraint has started to bite hard and, in contrast to the private sector, the proportion of freezes is rising."
A separate study into average pay suggested wage growth had all but fizzled out.
VocaLink, a company that processes millions of workers' pay through the Pay As You Earn scheme, calculated annual pay increases fell from 1.5 per cent in March to 0.9 per cent in April, the lowest level it has recorded since it started its monthly survey in 2004.
Marion King, chief executive of VocaLink, said: "Firms are continuing to keep their labour costs contained as competitive pressures remain high and economic activity recovers only gradually. In addition, the uncertainty surrounding the impending General Election is likely to result in caution over major business decisions.”