Consumers have another three years of low wage growth, according to forecaster the EY Item Club.

The report said that annual wage growth is likely to stay below the rises of up to 5% seen before the financial crisis began in 2008, leading to slow consumer spending growth.

"Total household incomes have strengthened because more people are in work, but individuals do not have extra money in their pockets," said Martin Beck, the EY Item Club's senior economic adviser. "Real wages are being held back by strong growth in the supply of workers and the fact that firms are facing increased non-wage costs, such as new pension schemes.”