Last week, the Office for National Statistics reported that the annualised growth rate for total pay (including bonuses) was 2 per cent in the three months to September – which means that the average earner is becoming steadily poorer, because the cost of living is rising more quickly than income. If you believe the Consumer Price Index (the one preferred by the Government), inflation is 3.2 per cent a year. Look at the Retail Prices Index, however, and you’ll see inflation running at about 4.5 per cent a year. But even that understates the squeeze on many households with tight budgets.