UK pay hit by inflation but unemployment falls to 48-year low

Businesses have been raising bonuses to maintain staff, a City analyst said. Photograph: Victoria Jones/PA

Soaring bonuses for City bankers and high signing-on fees for construction and IT professionals pushed Britons’ average annual pay up by 7% in March, but most workers suffered a fifth consecutive month of falling living standards.

Without bonus payments, workers were paid an average 4.2% wage increase in the three months to the end of March, well below the 7% inflation rate recorded in the same month, according to the Office for National Statistics.