The UK's wage and employment figures fell short of market forecasts, increasing the likelihood of a rate cut at the Bank of England in June and leading to a generally weaker value for the British Pound.
The week's decline for the Pound to Euro rate continued to 1.1708 after the Office for National Statistics (ONS) reported average earnings, including bonuses, increased 5.6% in January, under the forecast 5.7% figure and below 5.8% growth in December.
The rate reached a high of 1.1750 in early Monday trade, Pound Sterling Live reports.
Excluding bonuses, average earnings increased 6.1%, less than December's 6.2%.
The Pound to Dollar rate was also weaker, trading at 1.28 immediately after the figures were published.
In addition, the ONS stated the UK's unemployment rate edged up to 3.9% in January from 3.8% in December, as employment declined by 21,000 in the three months to January in comparison to the three months to November.
Wages in the UK continue to exceed levels that align with the Bank of England's goal of achieving a sustainable 2.0% inflation rate.
However, the trend indicates a clear direction. Declining job vacancies and an increasing unemployment rate indicate an ongoing relaxation of the labour market, which will likely lead to additional downward pressure on wages.
This scenario could enable the Bank of England to implement rate cuts in the summer.
Sterling would face pressure if future data hike the odds of an interest rate rise in June, the Pound Sterling Live report adds.
"The easing in wage growth in January is probably still a bit too slow for the Bank of England's liking. But there are encouraging signs that a more marked slowdown is just around the corner and that an interest rate cut in June is possible," said Paul Dales, Chief UK Economist at Capital Economics.
However, according to FX Markets Analyst at Ballinger Group, Kyle Chapman, the fall in wage growth is encouraging "but certainly not a victory for the Bank of England.
"Slowing vacancies is a clear sign that the labour market is heading in the right direction. But for us, this report broadly confirms again that worries about inflationary persistence are not unfounded. The August cut will require a turning point in the data that we are yet to see," he stated.