Than both inflation and wages

people at the lower end of the income scale actually buy.

“That’s because if you have less disposable income you are spending everything you have more or less on essentials.

“It means inflation in real terms for people at the lower end of the income scale is actually at a higher percentage than the headline figure.

There’s bad news for workers with salaries expected to rise by only 1% in the next year because of an oversupply of job applicants, according to a new forecast.

An increase in the number of workers from the EU, ex-welfare claimants and older workers are key factors in the predictions of modest pay increases, said the Chartered Institute of Personnel and Development (CIPD) and Adecco Group.

The increase in the supply of labour has led to 24 applicants chasing every low-skilled job, 19 candidates for every medium-skilled vacancy and eight for high-skilled posts.

Gerwyn Davies of the CIPD, the professional body for human resources employees, said: “Productivity levels are stagnant, public sector pay increases remain modest while wage costs and uncertainty over access to the EU market have increased for some employers.

“At the same time, it is also clear that the majority of employers have still been able to find suitable candidates to employ at current wage rates due to a strong labour supply until now.”

Peter Dowd, Labour’s Shadow Chief Secretary to the Treasury, said: “Prices are rising, and wages are slowing, leaving working families struggling to make ends meet.

“Only a Labour government will ensure working people’s living standards are protected with a real Living Wage of £10 per hour and invest in a high-skill, high-wage economy.”