Investing.com - The pound fell to the day’s lows on Wednesday after the latest UK jobs report showed that wage growth slowed at the end of last year, underlining concerns over an expected squeeze on consumer spending in the coming months.
GBP/USD was down 0.32% to 1.2426 from around 1.2450 ahead of the data.
The UK unemployment rate remained steady at an 11-year low of 4.8% in the three months to December, the Office for National Statistics said.
The number of people claiming unemployment benefit fell by 42,400 to 787,400 in January compared with a revised fall of 20,500 in December.
The ONS also said earnings excluding bonuses rose by 2.6% in the last quarter, down from 2.7% a month ago.
Including bonuses, earnings also rose by 2.6%, down from 2.8%.
The report came a day after figures showing that the annual rate of inflation rose by 1.8% in January, the most since June 2014 as the Brexit-fueled drop in sterling pushed up import prices.
The data added to concerns that the weaker pound will continue to erode consumers spending power in the coming months.
Sterling was also weaker against the euro, with EUR/GBP rising 0.2% to 0.8496 from around 0.8478 earlier.
Demand for the dollar continued to be underpinned after Federal Reserve Chair Janet Yellen said the bank is on course to raise interest rates.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.22% at 101.42, the most since January 11.
In testimony to the U.S. Senate on Tuesday, Yellen said a rate increase would be appropriate at one of the Fed’s forthcoming meetings if the economy evolves in line with expectations.
She added that waiting too long to remove monetary policy accommodation would be unwise. The Fed has indicated that it could hike rates three times this year.