Workers are struggling to make ends meet because wages are failing to keep up with rising inflation, campaigners said in reaction to the latest labour market figures.

Ashwin Kumar, chief economist at the Joseph Rowntree Foundation, said 2017 had been a year of "stress" for family finances, adding: "Work should provide a route out of poverty, but one in eight UK workers are finding that this isn't the case, despite record employment."

Matthew Percival, head of employment at the CBI, said: "The number of people in employment has fallen, but the unemployment rate remains low and there are still opportunities for job seekers with vacancies at a record high.

"Pay growth is picking up a little, but rising inflation means that many people won't feel the benefit yet.

"Raising productivity is key to turning this around.

"Progress from business and government on the Industrial Strategy must help to raise living standards across all parts of the UK."

Christmas dinner with roast turkey and all the trimmings
Christmas dinner with roast turkey and all the trimmings

Stephen Clarke, economic analyst at the Resolution Foundation, said: "Britain's remarkable jobs boom looks like it may have finally reached the end of the road.

"This still leaves Britain with one of the highest employment rates in Europe, though still some way behind countries like Germany, the Netherlands and Sweden."

Suren Thiru, head of economics at the British Chambers of Commerce, said: "While the UK unemployment rate remains historically low, the second successive drop in UK employment suggests that labour market conditions are moderating a little.

"However, the drop in both UK unemployment and employment was at least partly due to the rise in people who are now classed as economically inactive."

TUC general secretary Frances O'Grady said: "Real wages have now fallen for the last eight months in a row and working people will be worse off this Christmas than they were a decade ago."

Employment minister Damian Hinds said: "We're ending the year on a strong note with figures showing the unemployment rate has fallen every month in 2017, and is now at the lowest it's been in over 40 years."

Shadow work and pensions secretary Debbie Abrahams said: "Today's figures are further evidence of Tory economic failure, only a day after inflation rose to its highest level in over five-and-a-half years."