Workers' total earnings including bonuses after taking inflation into account fell by an annual 0.4 percent in the three months to April after edging up 0.1 percent in the first quarter. Consumer inflation has been running above the central bank's 2 percent target for the last three months and is now at 2.7 percent year-on-year.
British workers' earnings after inflation are shrinking at the fastest pace since 2014, underscoring the economic challenge facing a weakened Prime Minister Theresa May as the squeeze on consumers tightens faster than expected, data showed.
The Bank of England is expected to keep interest rates on hold on Thursday despite mounting pressure to take action as households suffer amid soaring inflation.
United Kingdom workers' earnings after inflation fell at their fastest rate since 2014 in the three months to April, implying a squeeze on incomes and therefore on consumption and ultimately on economic growth.
British government bond futures also see-sawed on the figures and last stood at 128.39, down 17 ticks on the day - similar to their level before the data.More news: Chinese police detain chairman of Anbang, which sought ties with Jared Kushner
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May's botched election gamble has left her so weakened that her Brexit strategy is the subject of public debate inside her party, with two former prime ministers calling on her to soften her European Union exit approach.
Britain's economy has been resilient to political uncertainty since last June's Brexit vote.
Inflation has been rising steadily in recent months, as the drop in the pound by as much as a fifth against the dollar since Britain voted in June previous year to leave the European Union makes imports more expensive.
The Office for National Statistics reported a fall of 0.6% in average wages.
Asked by Reuters if he expected the government's Brexit strategy to change, Baker said: "I don't foresee any change". On balance, most economists do not expect the Bank of England policymakers to raise rates from their record low of 0.25 percent this week amid fears of a shock to the economy from Brexit negotiations.