Annual growth in the weekly pay and bonuses has decreased according to the Office of National Statistics.
A May rate of 2.7 pct growth was reduced to 1.3 pct in June as averages earnings decreased (regular pay) from 1.8 per cent to 1.6 per cent. Public sector growth far outweighed private sector at a rate of 2.9 per cent compared with 0.8 per cent.
Excluding bonus payments, growth in the private sector stood at 1.0 per cent compared with 3.1 per cent in the public sector.
"It still seems highly unlikely that wage pressures will pose an inflationary threat anytime soon, which supports the case for the Bank of England to keep interest rates down at 0.50% for many months to come. Even if inflation expectations rise further, this is unlikely to translate into markedly increased pay awards given high unemployment and the uncertain labour market outlook." said IHS Global Insight Chief Economist, Howard Archer.
"Indeed, with wage growth muted and a major fiscal squeeze increasingly kicking in, it is hard to see consumer spending being anything else than muted for an extended period." he added.
"Admittedly the fall in headline average earnings growth is primarily a bonus effect. But excluding bonuses, headline growth slowed from 1.8% to 1.6%. Consumers' incomes still look set to be tightly squeezed over the next couple of years." added Vicky Redwood, Capital Economics.