PoundSterlingLIVE - Pound Sterling rose after UK wage data beat expectations and the UK unemployment rate fell to 3.8% in December, underscoring a tight labour market that can ensure inflation stays elevated.
The Pound to Euro exchange rate gapped to 1.1730 from 1.1715 after the ONS said average earnings, with bonuses included, fell to 5.8% from 6.7% year-on-year in the three months to December. But this exceeded an expectation for a greater fall to 5.6%.
The Pound to Dollar exchange rate rose to 1.2640 from 1.26 ahead of the release.
When bonuses are excluded, the rate stands at 6.2%, down from 6.7% but above the expected 6.0%.
Odds of a June rate cut at the Bank of England faded following the wage data, which confirms the Bank of England's suspicion that inflation will prove difficult to return to the 2.0% target as a result of strong wage dynamics.
Wages will prove slow to fall back and ease inflationary pressures owing to the strong labour market, where the unemployment rate is reported at 3.8% by the ONS, which is below the 4.0% the market was expecting.
These latest data from the ONS use a reweighted Labour Force Survey (LFS) for the employment statistics and replace the experimental survey data the ONS has utilised since October.
An original version of this article can be viewed at Pound Sterling Live
