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UK average earnings rise more than expected, unemployment falls

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UK average earnings rise more than expected, unemployment falls

U.K. unemployment fell to the lowest rate since 1975 and wages grew faster than expected in the three months to January, sending the pound higher against the dollar as investors bet the data would make the Bank of England more likely to raise rates.

Unemployment fell to 4.3% from 4.4% in the fourth quarter of 2017, and from 4.7% a year earlier, the Office for National Statistics said.

Average weekly earnings in nominal terms, including bonuses and not adjusted for price inflation, rose by 2.8% from a year earlier, slightly above expectations of a 2.7% increase. Excluding bonuses, average weekly earnings increased by 2.6%. In real terms, average weekly earnings, including bonuses, were unchanged from a year earlier but were down 0.2% after excluding bonuses.

The British pound was up 0.50% against the U.S. dollar to $1.4068 as of 6:01 a.m. ET.

"Today's data may well give policymakers the green light to hike rates again in May," said James Smith, developed markets economist at ING Research.

The employment rate stood at 75.3%, up from 74.6% a year ago and the joint highest since 1971. The number of people in work totaled 32.25 million, an increase of 402,000 over 12 months.

Claimant count increased by 9,200 to 837,800 in February from 828,600 in January. Claimant count was expected to decrease by 5,000, according to Econoday's consensus estimate.