Pay is rising at the fastest pace since records began in a blow to the Bank of England’s fight against inflation.

Wages excluding bonuses grew at 7.8pc in the three months to June, figures from Office for National Statistics (ONS) show.

The rate is the fastest pace since the ONS began collecting data in 2001. June’s figure was also well above City expectations of 7.4pc growth. Pay increases have accelerated from 7.3pc last month, which itself was a record.

Pay rises in the private sector averaged 8.2pc in the three months to June when excluding bonuses, the largest on record outside of the pandemic.

Public sector staff were given a 6.2pc uplift, the highest since 2001.

The shock rise will fuel fears at the Bank of England that Britain is entering a wage-price spiral, where climbing pay awards drive inflation.

Andrew Bailey, the Governor of the Bank, has called current pay increases “unsustainable” and urged both employers and employees to show restraint.

Mr Bailey has signalled that wage growth data is now the most important factor for the Bank when deciding interest rate policy.