In the three months to August 2018, average weekly earnings (not adjusted by inflation), increased by 3.1% excluding bonuses, and by 2.7% including bonuses.

But in real terms (adjusted for inflation), wages increased by 0.7% excluding bonuses and by 0.4% including bonuses, compared to a year earlier.

The figures from the Office for National Statistics (ONS) revealed that average pay stood at £523 per week, up from £508 per week a year earlier. Taking into consideration inflation, the figures stood at £492 and £489 respectively.

While wage growth has reached its highest level in a decade, Graham Spooner, investment research analyst at The Share Centre, said: “This wage news is unlikely to get the man on the street rushing out to spend as many of the core staples to everyday life have increased meaning that in real terms the rise is far less significant.”

Turning to employment figures, there were 32.29 million people in work, which is 289,000 more than the previous year. But comparing June to August 2018 with the previous three months, the employment rate was shown to have dipped slightly from 75.7% to 75.5%.

There were 1.36 million unemployed people which was 47,000 fewer than for the March to May 2018 period, and 79,000 less than for a year earlier. The unemployment rate stood at 4% and hasn’t been lower since December 1974 to February 1975.

Pawel Adrjan, UK economist at global job site Indeed, added that Britain’s labour market is slowly pivoting from job growth to pay growth.

He said: “Average pay is now growing at its fastest rate since 2008, and the curtain could finally be starting to come down on the lost decade of stagnant wages.

“With the number of new jobs created flatlining as the economy hovers close to full employment, employers are having to fight harder and pay more to recruit staff.

“But while pay growth is slowly creeping up, the rising cost of living is clawing back much of the benefit for workers – and the average employee’s purchasing power is still £11 less per week than at the pre-crisis peak over ten years ago.”