The British pound declined against the euro on Thursday, as worries continued following data that revealed weak growth for wages of British workers.
Investors remained concerned today following a report published yesterday by the UK Office for National Statistics on the condition of the British labor market between October and December. The report, which revealed that wages rose by 2.6% in the last quarter of 2016 to miss estimates, warned that slower wage growth will harm consumer spending, one of the main drivers of the economic growth.
This added to worries that the British pound, which is still weaker since the Brexit referendum despite recent recoveries, will slow down consumer spending in the coming months. Negative pressures from wage growth and consumer spending could derail the economic growth, especially as inflation rates outpace gains in wages.
The market now looks forward to the upcoming release of UK retail sales in January tomorrow, which will give more insight into the economic situation in the nation. The movement of the British pound has been heavily dependent on data in recent months.
EUR/GBP traded at 0.8545 as of 19:05 GMT, from 0.8549 at 17:20 GMT, the pair’s highest level since February 8. EUR/GBP opened trading today at 0.8504.
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