BRITAIN desperately needs an economic recovery built on wage growth, the TUC said yesterday as new figures showed a slowing of growth in earnings.

Unemployment fell by 60,000 in the most recent quarter but still stands at 1.69 million, or 5.1 per cent.

Average earnings increased by 1.9 per cent in the year to December, 0.2 percentage points down on the figure for the previous month.

Tory Work and Pensions Secretary Iain Duncan Smith said: “At a time when we are seeing the number of workless households at its lowest ever, this is further proof that our economic and welfare reforms are delivering more security and providing opportunities that give families the best chance in life.”

But TUC general secretary Frances O’Grady said it was no time to be complacent. “It’s good news that employment is rising, but more needs to be done to ensure these jobs are decent quality,” she said.

“Wage growth remains in the slow lane. Putting money back into people’s pockets is essential to securing a strong recovery and avoiding the debt-fuelled spending boom that caused the last financial crisis.”

The Office for National Statistics figures show 31.4 million people are in work, 760,200 claiming jobseeker’s allowance and a record 776,000 job vacancies.

But Yorkshire and the Humber saw a 8,000 increase in unemployment and there was a 2,000 rise in the East Midlands.

Disability charity Scope said disabled people were “at risk of being left behind in the recovery,” warning that the employment gap had “remained static at around 30 per cent for more than a decade.”

The highest numerical drop in unemployment was in the north-west, where 19,000 fewer people were classified as unemployed than in the previous quarter.

And Labour-governed Wales saw a 12,000 fall. First Minister Carwyn Jones said: “Today’s figures show the labour market in Wales continuing to outperform the UK as a whole.

“The increase in employment, decrease in unemployment and fall in economic inactivity in Wales over the last 12 months have all been at rates of more than double those of the UK as a whole.”