British pay rose more than analysts had forecast in the 3 months to June, official data showed, supporting concerns about building wage pressures as the Bank of England prepares to publish its Inflation Report later today.
The Office for National Statistics said average earnings rose 4.4 per cent in the three months to June, steady compared to the upwardly revised figure for the three months to May, but higher than the 4.3 per cent economists predicted.
The data suggests a further tightening of the labour market, which will support Bank of England policymakers' concerns that wage inflation may lead to broader inflationary pressures in the economy in the future.
"It was quite strong data but it's not going to move the markets much ahead of the Inflation Report," said Mr Tim Fox, strategist at National Australia Bank.
Interest rate futures, which were already lower on the session, held steady after the data.
Separately, the number of Britons claiming unemployment benefits dropped more than expected in July. The claimant count fell 13,700, compared to analysts' expectations of a drop of 8,000.
The measure of unemployment rose 27,000 in the three months to June compared to the previous three months, but was down 33,000 on the same period a year ago, the ONS said.