Euro to Pound (EUR/GBP) Exchange Rate erases yesterday’s gains on UK jobs data

The Pound recovered lost ground against the Euro on Wednesday after finding support from the release of positive UK jobs data and Bank of England policy meeting minutes.

According to the Office for National Statistics the number of people claiming unemployment benefits fell by 34,600 last month and the overall unemployment rate remained unchanged at 7.2% in the final quarter of 2013 and was in line with forecasts.

The Bank of England minutes also offered the Pound some support as it showed that the Central Bank’s policy makers were all in agreement over maintaining interest rates at the record low level of 0.5%. It also showed that most believe that the UK economic recovery is broadening.

The Euro did find some support against other peers after data released earlier in the session showed that pay in the Eurozone grew more rapidly than expected in the final quarter of last year.

The rise in wages will likely be welcomed by members of the European Central Bank’s governing council as a sign that underlying inflationary pressures are set to pick up and could ease concerns over the threat of deflation. The Euro zone’s annual rate of inflation fell to 0.7% in February from 0.8% in January, taking it further below the ECB’s target of just below 2.0%.

A separate report showed that construction output rose for a second consecutive month in January.

The Euro to Pound exchange rate remains under pressure from events in Ukraine. Wednesday saw pro-Russian forces occupy a major Ukrainian naval base. Tensions are high but so far no conflict has erupted.