Wages grew by 2.6% in the three months to January while the unemployment rate fell, according to new data.
The Office for National Statistics said that earnings growth was slightly higher than the 2.5% rate in the previous period.
It adds to evidence that the squeeze on household income may be coming to an end after inflation fell to 2.7% in February.
Meanwhile, the unemployment rate ticked lower to 4.3% from 4.4%.
A small estimated increase in the number of unemployed people during the quarter did not dent the overall rise in employment over the last year.
Matt Hughes, senior statistician at the ONS, said: “Employment and unemployment levels were both up on the quarter, with the employment rate returning to its joint highest ever.”
He said: “Total earnings growth continues to nudge upwards in cash terms. However, earnings are still failing to outpace inflation.”
The number of unemployment benefit claimants rose by 9,200 to 838,000 in February.