LONDON: Sterling rose towards recent seven-year highs against the euro while gilt futures fell on Wednesday after data showed British pay growth outstripped inflation by the most in several years in December and the jobless rate fell.
Average weekly earnings, including bonuses, rose 2.4 percent in annual terms in December, well above inflation of 0.5 percent and beating forecasts.
The Office for National Statistics also said Britain's unemployment rate fell to 5.7 percent, its lowest level in more than six years.
Sterling rose to 73.88 pence per euro, not far from a seven-year high of 73.715 pence struck late last week. Against the dollar, sterling rose 0.6 percent to a high for the day of $1.5430, up from $1.5377 before the data was released.
UK government bond futures extended falls and last stood at 119.23, down 45 ticks on the day.
"Its solid data all round," said a spot trader.
Separately, minutes from the latest Bank of England policy meeting showed signs of division among policymakers re-emerge about the outlook for interest rates, although they voted unanimously for the second month running to keep policy on hold.
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