Wages rising for first time in a year

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Tej Parikh, senior economist at the Institute of Directors, said: "The labour market continues to be a bright spot for the United Kingdom economy".

At 4.30 am ET Tuesday, the Office for National Statistics is slated to issue United Kingdom unemployment data for three months to February. One of the BoE's policymakers, Ian McCafferty, said in a Reuters interview last week that he thought pay would grow slightly more quickly than the consensus view among his colleagues.

It is not yet clear whether the steeper than expected fall in consumer prices will be enough to encourag the BoE to "wait and see" for a few more months before raising rates again, or if it will be minded to go ahead out of concern over the faster pace of wage growth.

There were 1.42 million unemployed people in the United Kingdom over the period, according to the ONS, 16,000 fewer than September to November 2017.

Unemployment has fallen steadily in the United Kingdom since peaking at 8.5 per cent at the end of 2011, as the global financial crisis led to workers being laid off. The bank is tasked with setting policy to achieve an inflation rate of around 2 percent and updated figures due Wednesday are not expected to show much change in the annual rate in March.

Senior ONS statistician Matt Hughes said: "The labour market continues to be strong, and for the first time in nearly a year, earnings have grown slightly after inflation has been taken into account".

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Excluding bonuses, wage growth accelerated from 2.6% to 2.8% in the three months to February when compared to the same period a year ago, but overall weekly earnings held steady at 2.8% instead of rising as forecast to 3%. "The unemployment rate fell, too, and is at its lowest since 1975".

Sterling has been boosted by expectations that the Bank of England will raise interest rates.

Forecaster are split on whether or not the Bank of England will raise rates from 0.5% to 0.75% in May, but the latest positive economic data seems to make that increase more likely.

-First "real wage" increase in 12 months seals deal on BoE rate hike.

Markets and economists appear to be disagreeing over how positive today's United Kingdom wage growth figures are, with the former selling the Pound (GBP) while the latter claims a rate hike may be on the way; the EUR/GBP exchange rate has been able to hold opening levels as a result.

The pound gained more than 0.2% to $1.437, beating a previous post-Brexit-vote high set in January.

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