UK wage growth accelerates, but unemployment stuck

Wages in the U.K. showed a promising increase in the three months to October, according to official data published Wednesday, despite unemployment remaining stuck at 6 percent.

Average weekly earnings rose 1.4 percent year-on-year over the three month period to the end of September, the Office for National Statistics said, beating analyst expectations of a 1.2 percent rise.

However, the jobless number saw its smallest decline since the three months ending September 2013.

Sterling pared losses on the news to trade around 1.572 against the greenback, after trading near 1.567 before the release.

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"The average wage growth was astonishing. This represents that the job market is tremendously robust," Naeem Aslam, the chief market analyst at Avatrad, said in a research note.

Howard Archer, an economist at IHS Global Insight, said that earnings growth was starting to open a "positive gap" above inflation, although it was still somewhat limited.

"This bodes well for consumer spending in 2015, although it needs to be borne in mind that consumers have faced a prolonged squeeze on their purchasing power," he said in a research note.

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BoE remains split

Meanwhile, the minutes from the Bank of England's (BoE) latest rate-setting meeting showed that policymakers remain divided on whether or not to hike interest rates in the U.K. Two members of the central bank's Monetary Policy Committee (MPC) - Martin Weale and Ian McCafferty - again voted for an interest rate hike in December. The economists are widely viewed as the most hawkish policymakers at the Bank of England.

Both voted in favor of raising the main interest rate by 0.25 basis points, as they have done since August, according to minutes of the meeting released on Wednesday.

"I think we'll stay that way for awhile now," said Adam Cole, head of currency strategy at RBC, who said he believes the U.K. would have to see significant wage increases before expectations of a rate hike are increased.

Many economists are still expecting a rate rise at some point in 2015, although some - including HSBC - have pushed their predictions back to the start of 2016.

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Any future move in policy has been complicated by a dramatic fall in the price of oil since June which has weighed on headline inflation figures and pushed consumer price growth below the Bank of England's target of 2 percent.

Central bank governor Mark Carney told the Birmingham Post last week that market participants were right to rule out an interest rate hike any time soon and predicted that inflation would slump over next six months.

Official data published Tuesday showed that consumer prices in the country grew by 1.0 percent, year-on-year, in November 2014, down from 1.3 percent in October.


- By CNBC's Matt Clinch