LONDON, March 21 (Reuters) - Sterling hit the day’s high on after data on Wednesday showed that British workers’ overall pay rose at the fastest pace in nearly two-and-a-half years over the three months to January, boosting chances that the Bank of England will raise interest rates in May.
The Office for National Statistics also said the number of people in work grew by 168,000 in the three months to January. A Reuters poll of economists had pointed to a much smaller rise of 84,000.
Sterling extended gains after the data to hit the day’s highs at $1.4066, up nearly half a percent on the day. Before the data, sterling was up nearly a quarter of a percent thanks to a struggling dollar.
Against the euro, sterling also hit the day’s highs and traded up 0.25 percent at 87.25 pence. Britain’s blue chip FTSE 100 index extended losses very slightly, last down 0.4 percent.
British government bond futures fell more than 30 ticks after the data, pushing two-year government bond yields 5 basis points higher on the day to 0.936 percent, their highest since May 2011, according to Tradeweb data. (Reporting by Saikat Chatterjee, David Milliken and Kit Rees; Editing by Tommy Wilkes)