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The pound hit its highest level since the Brexit vote

The pound hit its highest level since the Brexit vote

Sterling weakened as the data showed wages in the three months to February rose by 2.8 percent, unchanged from the growth rate in the three months to January and below a median forecast of 3.0 percent in a Reuters poll of economists.

Inflation, as measured by the consumer price index, was around 2.9%.

There was a further boost from the official labour market statistics as the unemployment rate fell to a fresh 43-year low of 4.2% and the jobless total dropped by 16,000 - reversing rises in the number seen over the previous couple of months. "The unemployment rate fell, too, and is at its lowest since 1975". Economists said the weaker-than-expected headline pay figure was unlikely to knock the Bank of England off course from raising interest rates next month for only the second time since the global financial crisis. After the labor market figures it was steady at $1.4363, its highest since the Brexit vote.

"The pound was the standout performer yesterday and is now the best performing G10 currency versus the U.S. dollar on a year-to-date basis".

Rising to $1.4364 by today morning, the pound has hit its highest level against the dollar since the Brexit vote in June 2016 amid hopes that the United Kingdom and European Union can avoid a hard Brexit and strike a deal. The next reading is due on Wednesday 18, April. What is clear however, is that a failure to raise rates in May will be bad for Pound Sterling.

Forecaster are split on whether or not the Bank of England will raise rates from 0.5% to 0.75% in May, but the latest positive economic data, something the bank has stressed it is looking for before rate hikes, seems to make that increase more likely.

At 1.1585, Sterling remains 13% lower against the Euro than it was on the morning of the Brexit referendum while the Pound-to-Dollar rate is only 1.1% below the 1.45 level it was at before the result became known.