Wages are rising at a record pace and are on the cusp of outpacing inflation.

It means our living standards are no longer taking the battering they once were.

That should give ordinary households something to celebrate but it will cause consternation at the Bank of England.

Policymakers have been keeping a close eye on wage growth because they fear that robust pay rises could fuel inflation.

It means they are even more likely to raise interest rates again at the next monetary policy committee meeting on 21 September.

The Bank is likely to raise rates from 5.25% to 5.5% in September but more rate rises will probably follow.

Financial markets now expect the base rate to peak at 6% - up from 5.75% last week.

That's bad news for anyone rolling off a fixed rate mortgage or sitting on a variable or tracker deal.

Renters are also likely to feel the pain as landlords try to pass on higher mortgage costs.

The Bank has raised interest rates for 14 consecutive times and the full impact of those rate rises is still working its way through the economy.

It's a tough call for policymakers because even though wages are still rising robustly (helped in part by the big one-off pay rise to millions of NHS workers) there are signs that the economy is weakening.

The inflation rate is falling, and figures released tomorrow will likely show that it fell again in June - from 7.9% to 6.8%.

This is still considerably above the Bank's 2% target, but it is moving in the right direction.

Rising interest rates are also taking their toll on the jobs market - the unemployment rate jumped from 4% to 4.2%. So, there are plenty of signs that monetary tightening is taking some steam out of the UK economy.

Members of the Monetary Policy Committee will have to weigh up all the data and make a judgement about the trend that wages, unemployment and inflation are likely to follow over the coming months.

Not only is inflation expected to drop rapidly but so is wage growth.

Samuel Tombs, economist at Pantheon Macroeconomics, said: "It usually takes time for changes in labour market tightness to feed through to wage growth, and several survey indicators now point to slowing wage increases."

However, he added: "The momentum in wage growth still is too strong for the committee to take a break just yet."