BRITAIN cannot afford another wages slump, unions warned yesterday as new figures showed inflation has overtaken wage growth.

The consumer price index (CPI) rose to 2.7 per cent in April, according to Office for National Statistics figures, above economist predictions of 2.6 per cent.

It means inflation is now outstripping wage growth, which rose by 2.3 per cent in the year to February.

TUC general secretary Frances O’Grady said: “The last thing Britain needs is another real-wage slump. But rising prices are hammering pay packets.

“Working people are still £20 a week worse off, on average, than they were before the crash. That’s why living standards must be a key battleground at this election.”

General union GMB said the news underlined the need for the government to lift the 1 per cent cap on pay rises in the public sector.

“These figures mean the wages of hospital cleaners, teaching assistants and care workers aren’t going up as quick as the cost of living,” the union’s leader Tim Roache said. “Simply put, it’s harder for ordinary people to make ends meet.

“Labour have committed to ending the public-sector pay cap — will the Tory Party give the same guarantee?” April’s rise keeps inflation above the Bank of England’s 2 per cent target.

It follows a standstill in February and March, when CPI stayed at 2.3 per cent.

The Bank of England said in its inflation report last week that CPI would peak at 3 per cent later this year.