21.02.201822:55:00UTC+00UK Wage Growth Steady, Unemployment Rate Rises

Rising employment in the UK may finally be leading to quicker wage growth, according to the latest labour market figures released. However, Britain's unemployment rate increased for the first time in nearly two years at the end of 2017.

British government bond prices increased and sterling briefly weakened against the U.S. dollar after the latest figures showed the sharpest rise in the number of people out of work in almost five years.

Average weekly earnings increased by 2.5 percent excluding bonuses in the fourth quarter of 2017, up from a rate of 2.3 percent in the three months ending in November, according to the Office for National Statistics, Britain's statistics agency.

This was the quickest rate of pay growth for a year, but was not enough to prevent remuneration in the final quarter of 2017 from dropping 0.3 percent compared to the same period in 2016, after adjusting for inflation.

There were also signs that productivity growth was increasing, with output rising 0.5 percent in the final three months of 2017, the second straight quarter of growth. The number of hours worked also dropped over the period.

The ONS said the jobless rate increased to 4.4 percent from 4.3 percent in the three months to December, the first rise since the three months to February 2016, and the number of unemployed was higher for a third consecutive monthly report.

The ONS attributed the rise in unemployment to a fall in the number of people who are neither working nor looking for a job.

Wednesday's labour market data are the first since the Bank of England's Monetary Policy Committee said earlier this month that interest rates may need to rise faster than previously thought to dampen domestic inflationary pressure.