Unemployment fell again in April as British firms kept on hiring workers, defying fears of an economic slowdown.

But wage growth slumped with regular weekly pay rising by just 1.7pc in the year, falling further behind inflation as prices spiked by 2.7pc over the same period. Since then inflation has risen further, hitting a four-year high of 2.9pc in May.

That means real wages are falling again for the first time since 2014, the Office for National Statistics said.

Economists fear that the blow to household spending power will undermine GDP growth, which powered ahead last year as consumer spending growth stayed strong, but slumped to just 0.2pc in the first quarter of the year.