The Office for National Statistics (ONS) charted a 2.9% annual increase in average weekly earnings, excluding bonuses, in the three months to July.

It represented a 0.5% jump on April to June, with the bulk of the increase coming in July when it measured growth of more than 3%.

The increase was announced just a day after the ONS confirmedinflation had returned to zero last month - with falling fuel prices credited.

When the rate of inflation was taken into account, it meant that people were seeing the strongest growth in regular pay since June 2002 in July, the ONS said.

It was not all good news for the Government though as wider data confirmed the jobless total had risen for the third consecutive month - by 10,000 to 1.82 million.

The chancellor, George Osborne, said: "It is welcome news that pay packets are rising and jobs are being created.

"With wages up 2.9% over the year and inflation low, working people have received the fastest real terms rise in over a decade."

He also rounded on Labour's new leadership when adding: "We still face risks both from the global economy and from those at home who would undermine our economic security, hike taxes and nationalise industry.

"This government will continue to support firms, increase training and provide more free childcare for working parents, as well as introducing a National Living Wage."

Mr Osborne made his comments less than 24 hours after Jeremy Corbyn used a speech to union leaders in Brighton to denounce the Tories as "poverty deniers".

Labour's shadow work and pensions secretary Owen Smith said: "It's welcome news that workers' pay packets are increasing after years of stagnating.

"However, this is now the third consecutive increase in unemployment and ministers mustn't become complacent about overall joblessness.

"With such low levels of productivity persisting in the workforce and high levels of youth unemployment, the Government must do more to bring about an increase in the number of secure jobs in the British economy."

The Bank of England has been paying particularly close attention to the recovery in jobs and pay as it decides when the time is right to start raising the base rate of interest.

Despite inflation standing at zero, the surge in pay growth could prompt more members of the Bank's monetary policy committee to support a 0.25% hike at next month's meeting following an 8-1 vote in favour of no change in September.