Sterling edged up against the dollar on Tuesday after data showed UK employment jumped although wage growth has yet to rise sharply, a development analysts said was unlikely to alter the immediate outlook for Bank of England interest rate rises.
Traders watched Tuesday’s unemployment and wages data for signs of whether inflation is feeding through to higher wage growth, a likely prerequisite to an interest rate hike.
The data showed annual growth in earnings, excluding bonuses, edged up to 2.9 percent in the three months to March, as anticipated in a Reuters poll, after a 2.8 percent rise in February.
The BoE held interest rates steady last week and cut its growth projections because of weak economic data, sending sterling to a four-month low against the dollar.
Market expectations of a rate raise in August are currently close to 50 percent compared with nearly 60 percent at the start of last week.
The pound rose 0.2 percent on the data to trade flat at $1.3545. It also traded flat versus the euro at 88.01 after weakening before the data was released.