Britain's "cost of living crisis" will return to the fore today when official data shows real wages falling again.
Pay growth briefly edged higher than inflation in the spring, marking a break in years of falling real wages and providing a boost to the Conservatives as they seek to take the squeeze on household budgets off the pre-election agenda.
Labour has argued that what it calls a cost of living crisis is far from over. Economists are predicting official figures will show that pay growth slowed markedly in the three months to April, undershooting inflation.
The gloomy predictions stem from the impact of income tax changes in April a year ago but are also likely to be taken as evidence of the pressures being felt by households.
There was a cut in the top rate of income tax last April and some employers delayed pay, particularly bonuses, to take advantage of the cut. That meant there was a spike in pay levels in April 2013 that is unlikely to have been repeated this year.
Economists are divided over how soon consistent growth in real wages will return, particularly given the uncertainty around how much of the growth seen in employment is into low-paid, insecure self-employment or part-time work.
They warn that for now the data will look gloomy. "While the case for firmer pay growth remains solid, we expect [the] labour market report to show a further slowing in the annual change in average weekly earnings.
This slowing is almost entirely due to the spike in the level of pay last April," said Allan Monks, economist at JP Morgan.
He predicts annual pay growth in the three months to April will come in at 0.6% but that wages will recover in the second half of this year to reflect a tightening labour market.
The consensus forecast is for 1.2% earnings growth, after 1.7% growth in the three months to March, according to a Reuters poll of economists.
They are predicting the same growth for pay excluding bonuses. Inflation in April was 1.8% on the consumer price index (CPI) measure and was 2.5% on the wider retail price index (RPI) measure, which includes housing costs.
The thinktank Capital Economics predicts: "The latest labour market figures are likely to show that employment is still growing strongly, but that average earnings are decidedly not." "Nonetheless, we still think that the real pay squeeze will be over soon."
The government may well get better news on unemployment, however, with the headline rate expected to drop further to 6.7% following a five-year low of 6.8% in the three months to March.
But trade unions have pointed out that much of the fall in the jobless rate, and the rise in employment, is down to the increase in people working for themselves.
The government has sought to portray the self-employment surge as a sign of an entrepreneurial spirit gripping the nation.
But a recent analysis by the TUC suggested that pensioners, part-time workers and 'odd-jobbers' were the fastest growing groups of Britain's new self-employed workforce while the number of people starting their own businesses had fallen in recent years.
Pay growth briefly edged higher than inflation in the spring, marking a break in years of falling real wages and providing a boost to the Conservatives as they seek to take the squeeze on household budgets off the pre-election agenda.
Labour has argued that what it calls a cost of living crisis is far from over. Economists are predicting official figures will show that pay growth slowed markedly in the three months to April, undershooting inflation.
The gloomy predictions stem from the impact of income tax changes in April a year ago but are also likely to be taken as evidence of the pressures being felt by households.
There was a cut in the top rate of income tax last April and some employers delayed pay, particularly bonuses, to take advantage of the cut. That meant there was a spike in pay levels in April 2013 that is unlikely to have been repeated this year.
Economists are divided over how soon consistent growth in real wages will return, particularly given the uncertainty around how much of the growth seen in employment is into low-paid, insecure self-employment or part-time work.
They warn that for now the data will look gloomy. "While the case for firmer pay growth remains solid, we expect [the] labour market report to show a further slowing in the annual change in average weekly earnings.
This slowing is almost entirely due to the spike in the level of pay last April," said Allan Monks, economist at JP Morgan.
He predicts annual pay growth in the three months to April will come in at 0.6% but that wages will recover in the second half of this year to reflect a tightening labour market.
The consensus forecast is for 1.2% earnings growth, after 1.7% growth in the three months to March, according to a Reuters poll of economists.
They are predicting the same growth for pay excluding bonuses. Inflation in April was 1.8% on the consumer price index (CPI) measure and was 2.5% on the wider retail price index (RPI) measure, which includes housing costs.
The thinktank Capital Economics predicts: "The latest labour market figures are likely to show that employment is still growing strongly, but that average earnings are decidedly not." "Nonetheless, we still think that the real pay squeeze will be over soon."
The government may well get better news on unemployment, however, with the headline rate expected to drop further to 6.7% following a five-year low of 6.8% in the three months to March.
But trade unions have pointed out that much of the fall in the jobless rate, and the rise in employment, is down to the increase in people working for themselves.
The government has sought to portray the self-employment surge as a sign of an entrepreneurial spirit gripping the nation.
But a recent analysis by the TUC suggested that pensioners, part-time workers and 'odd-jobbers' were the fastest growing groups of Britain's new self-employed workforce while the number of people starting their own businesses had fallen in recent years.
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