Pound sterling (GBP) jumps as UK wage growth accelerates though UK unemployment rises again
Sterling jumped this morning after new figures from the Office for National Statistics said basic wage growth had accelerated.
UK unemployment rose by 24,000 to 1.45m in the three months to January, according to the ONS.
The rate of unemployment fell from 4.4 per cent to 4.3 per cent, however, while basic wage growth accelerated to 2.8 per cent – 2.6 per cent excluding bonuses.
Sterling jumped 0.46 per cent against the dollar to $1.4063.
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“Employment and unemployment levels were both up on the quarter, with the employment rate returning to its joint highest ever,” said ONS statistician Matt Hughes.
“Economically inactive’ people – those who are neither working nor looking for a job – fell by their largest amount in almost five and a half years, however.”
He added: “Total earnings growth continues to nudge upwards in cash terms. However, earnings are still failing to outpace inflation.”
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“Tepid wage growth has been the anchor around the British economy for some time, but today’s positive reading gives the Bank of England the green light to raise interest rates again in the near future,” said Dennis de Jong, managing director at UFX.
“It has been a testing time for the UK since the vote to leave the EU, but with Brexit negotiations seemingly progressing well and wages on the rise, the economic outlook is starting to look a little brighter.”