Wage growth fell behind inflation for a seventh month in a row, according to new employment figures.

The Office for National Statistics said average weekly wages rose by 2.3% in the three months to October, below inflation at 3%.

Real earnings, which take into account the cost of living, fell by 0.4%

Unemployment declined by 26,000 to 1.43 million, while the jobless rate remained at 4.3%, the lowest since 1975.

However, while unemployment fell, the decline was not as steep as the 59,000 drop recorded in the three months to September.

The pressure on household finances is likely to worsen as the most recent figures for inflation showed a rise to 3.1% in November – the highest in nearly six years.

John Hawksworth, chief economist at PwC, said: “Real pay levels continue to be squeezed, and we expect this to persist for at least the first half of 2018, further dampening consumer spending growth.”

Average weekly pay, excluding bonuses, reached £478 which is the lowest since February 2006.

However, average weekly wages were ahead of the 2.2% rise in the three months to September.

Ben Brettell, senior economist at Hargreaves Lansdown, said: “The pay squeeze continues for now, but with wages growing a little more strongly and inflation set to fall back in the new year, this looks like it’ll come to an end in the next few months.”

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