British employment rose by 197k during the first three months of this year, the biggest jump since late 2015 and far exceeding the 130k market expectation.

Annual growth in earnings, excluding bonuses, edged up to 2.9% in the three months to March after a 2.8% rise in February, as expected. While this was the biggest increase since the three months to August 2015, it represented only a 0.4% increase in pay in inflation-adjusted terms.

Including bonuses, total pay growth cooled to 2.6% from 2.8% in the three months to February, as expected.

Last week the BoE left interest rates on hold, despite saying in February that borrowing costs were likely to go up more quickly than it had previously thought. It said it wanted to be sure the economy was bouncing back after barely growing in the first quarter.

Market expectations of a rate raise in August are currently close to 50% compared with nearly 60% at the start of last week.

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