EMPLOYMENT hit a new record high in the three months to April despite sluggish GDP growth at the start of the year - but pay growth remained disappointing.

Union and business leaders welcomed the record numbers in work, but concern was raised over the rate of pay.

TUC general secretary Frances O'Grady said wage growth was stuck in the slow lane, adding: "At this rate pay packets won't recover to their pre-recession levels for years.

Matthew Percival of the CBI said: "The data paints a familiar picture - strong employment growth and falling unemployment.

"Yet stubbornly slow pay growth means living standards remain under pressure, so doubling down on efforts to boost productivity remains critical."

Tej Parikh of the Institute of Directors, said: "The labour market continues to be a bright spot for the UK economy.

"The employment numbers are still moving upward despite wider economic uncertainty, and it is particularly encouraging that many previously inactive individuals are entering the workforce as real wages become more attractive."

Suren Thiru of the British Chambers of Commerce said: "The marked increase in employment and the continued drop in the number of people out of work confirms that the UK labour market continues to perform robustly, even though wider economic conditions are weakening.

"While pay is still outpacing price growth, the slowdown in earnings growth is a concern.

"Delivering sustained rises in real pay growth is likely to prove an uphill struggle amid weak productivity and a sluggish economy.

"As a consequence, household finances are likely to remain stretched, particularly given weak household savings and high debt levels."

A total of 32.39m people are in work, up by 146,000 on the three months to January, and by 440,000 year-on-year.

The female employment rate hit a record high of 71.3pc. The male rate is 80pc, the highest since 1991.

Unemployment fell by 38,000 compared to the previous three months, taking the total number out of work to 1.4m, the Office for National Statistics said.

The number of people registered as out of work in the North-East is now at 59,000, a fall of minus 8,000, 4.6 per cent, in the period. In Yorkshire and the Humber the jobless total stands at 120,000, a 4.4 per cent drop of 16,000.

Wage growth unexpectedly slipped to 2.8% from 2.9% in the three months to April. Economists had expected it to remain steady.

The slowdown is likely to dampen expectations of an interest rate rise in August.

Wage growth is one of the key figures the Bank of England monitors to assess the health of the UK economy.

Although it is above the current level of inflation of 2.4%, it remains well below inflation's five-year high of 3.1% seen in November.

This consumer spending squeeze is one of the reasons many shops are currently struggling.

Economists said the latest figures reduce the chances of a near-term increase in interest rates.

The Bank of England, however, is expecting wage growth to pick up.

Last month it said it expected to see pay growth of 2.75% a year by the end of 2018, rising to 3.5% by the end of 2020.