British workers suffered a sixth straight year of falling real pay in 2014, taking earnings back to levels last seen at the turn of the century, according to official figures.
Pay, when adjusted for inflation, was 1.6% lower this year than in 2013, the Office for National Statistics said in its annual survey of hours and earnings.
Weak wage growth has persistently been outstripped by inflation meaning workers have seen their real pay fall every year since 2008, back to the levels they were paid in the early 2000s.
Median gross weekly earnings for full-time employees barely grew this year, rising by just £1 to £518 in April 2014 compared with 2013. It was the smallest rate of growth since the ONS started the survey 17 years ago.
The figures laid bare the financial pressures that continue to weigh on UK households, despite falling unemployment and economic recovery which has put the economy on course to grow by about 3% this year.
Policymakers at the Bank of England have persistently cited unexpectedly weak wage growth as one of the reasons why interest rates remain at an all-time low of 0.5%, unchanged since March 2009.
The gender pay gap - which measures the disparity between what men and women earn - narrowed to 9.4% in 2014 from 10% in 2013. It was the lowest since records began in 1997, when the pay gap was 17.4%.
Although a reduction in the gender gap is obviously welcome news, it is a small drop of just 0.6 percentage points. The median hourly earnings for full-time workers show that men still earn 9.4% more than women, which is still wide compared to many advanced economies.
Commenting on the report, the chancellor, George Osborne, said: “These figures also show that the gender pay gap has fallen significantly and now stands at its lowest level since records began - another sign of real progress in the fight for equal pay.
“The great recession made our country poorer but the only way to improve living standards is to continue working through the plan that’s delivering a brighter economic future.”
In a separate report, the ONS said there were 236,000 jobs - 0.9% of employee jobs - which paid less than the national minimum wage (NMW) in April 2014.
Among 16 to 17 year olds the figure is just under 3% at 9,000. This is accounting for a revision in the methodology used, which looks at the apprentice national minimum wage rate. Based on the old methodology, 1.2% of jobs would be below minimum wage - a 0.1 percentage point increase on last year.
Bar staff and waiters and waitresses were among the occupations most likely to be low paid. At the other end of the scale, low pay was least prevalent in professional occupations.
In April 2014, the NMW was £6.31 for employees aged 21 and over, £5.03 for employees aged 18 to 20, £3.72 for employees aged 16 to 17, and £2.68 for apprentices aged 16 to 18 and those aged 19 or over who are in the first year of their apprenticeship.
This article was written by Angela Monaghan, Alberto Nardelli and George Arnett, for theguardian.com on Wednesday 19th November 2014 10.58 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010