HOUSEHOLDS in Great Britain are being weighed down by a continuing fall in real earnings, amid weak nominal pay settlements and a Brexit vote-fuelled surge in inflation, latest official figures show.

The Office for National Statistics said yesterday that average weekly earnings for employees in Great Britain, excluding bonuses, were in the three months to September down by 0.5 per cent on the same period of 2016. This marked an acceleration in the pace of decline from the 0.4 per cent year-on-year drop in the three months to August.

Howard Archer, chief economic adviser to the EY ITEM Club think-tank, said: “There is still little evidence that a tight labour market is translating into higher pay, despite inflation being up at three per cent. Thus the squeeze on consumers remains appreciable, with obvious negative implications for personal expenditure.”

The ONS figures show regular pay rose by 2.2 per cent year-on-year in nominal terms in the three months to September. This was well adrift of annual consumer price inflation thus resulting in the real-terms fall.

Figures on Tuesday showed annual UK consumer prices index inflation stayed stuck at a five-year high of three per cent in October. This is up from 0.3 per cent in May last year, before the Brexit vote. Inflation has been fuelled by sterling’s post-Brexit vote weakness.

Stephen Boyle, chief economist at Royal Bank of Scotland, noted there was no Scottish breakdown of the average earnings data but added: “There’s no reason to believe that Scottish workers aren’t facing the same squeeze on their incomes that applies across the rest of the UK.”