Wages have risen by 3.5 per cent in the year up until July, the latest figures from the Office for National Statistics (ONS) state.
The ONS attributes the increase to strong manufacturing and private sectors, although the public sector has seen decreased growth.
Pay rises in the public sector reached 2.7 per cent but was surpassed by pay increases (including bonuses) in the private sector which hit 3.7 per cent.
Commenting on the data, Vicky Redwood from Capital Economics comments that the labour market appears to be tightening driven by strong employment growth.
Employment minister Caroline Flint adds that the figures show a step in the right direction for full employment, an initiative launched by prime minister Gordon Brown on Monday.
"The prime minister announced measures to fast track more lone parents into jobs that are vacant and confirmed plans to help 250,000 people into jobs through the Local Employment Partnerships," she remarks.
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