Stronger-than-forecast employment data failed to give a definitive lift to sterling in the aftermath of Tuesday´s inflation report.
Official figures showed the UK economy added another 122,000 jobs in March, significantly beating expectations. UK unemployment fell to 4.6% from 4.7%, its lowest level in 42 years.
The news served to provide some support for the pound, which had come under pressure following Tuesday´s inflation report. UK inflation rose to 2.7% in April versus 2.3% for the prior month.
Sterling appeared on course to lose further ground against the euro following Tuesday´s weakness.
Despite the oft-lauded fears of an imminent Brexit-related slowdown, the latest jobs figures indicate that the UK economy remains in expansion mode.
While this should be good news for the UK government as it prepares to fight a general election on 8 June, there is reason for caution. Data released today also showed average weekly earnings excluding bonuses were lagging inflation in the three months to the end of March.