Average earnings are rising at the slowest rate for 18 years, it emerged today, part of an economic picture that more than one analyst dubbed "truly awful".

Total salary payments in the three months to January 2009 rose by just 1.8% - a reflection of the fact that fewer and lower bonuses were paid to City workers.

That's the slowest rate of growth since 1991, and is down from 3.1% in the three months to December 2008.

James Knightley at ING said the "awful" numbers will hit the economy: "We doubt that real consumer spending growth will return to positive territory until 2011. We could yet see the need to the Bank of England's quantitative easing efforts to be stepped up even further."

Minutes of the monetary policy committee's March meeting show the Bank is ready to make that move. All members backed the decision to increase the money supply by £75 billion and to cut interest rates by half a point to 0.5%.

But the MPC is concerned that the fall in interest rates is affecting bank profits, suggesting that they will not be cut any further. Vicky Redwood at Capital Economics said: "The minutes of March's MPC minutes give further confirmation that official interest rates are unlikely to fall any further, but also suggest that the first round of quantitative easing just announced may not be the last."

The wage figures increase fears that the recession will be lengthy, perhaps not showing signs of recovery until 2011.

Alan Tomlinson at insolvency firm Tomlinsons said: "The CBI's prediction, last month, that unemployment will peak at just over three million in the second quarter of 2010 could prove to be wildly optimistic."

Howard Archer at IHS Global Insight said today's figures were "truly awful".