LONDON, March 19 (Reuters) - Sterling was steady on Thursday as markets focused on the Bank of England's interest rate decision later in the day, with investors looking out for any clues from policymakers about the impact of the Iran war.
Data published on Thursday meanwhile showed that British wages, excluding bonuses, rose at their slowest pace since late 2020 in the three months to January. The figures also suggested a weakening in employment might have bottomed out.
“With unemployment staying steady at 5.2% and a rare gain in payrolls employment, this report paints a mildly more positive picture of the labour market. And with wage growth softer again, in normal times this would have been a relatively reassuring report for the Bank of England. But the report feels stale in light of the Iran conflict, and the inflation risks stemming from the large spike in energy price," Luke Bartholomew, deputy chief economist at Aberdeen, said in a note.
The pound was last little changed against the dollar at $1.3259, having hit its lowest level since early December last week. The euro was also last roughly unchanged against sterling at 86.37 pence .
The BoE is widely expected to leave rates unchanged at this meeting. Markets had been pricing in a rate cut until recently, however the oil price spike brought on by the Iran war has created widespread uncertainty, stoking inflation fears and leading to shifts in policy expectations.
"While today’s Bank of England meeting had once looked like the likely point of the next rate cut, instead policy is set to be kept on hold today as policymakers give themselves more time to see how the conflict plays out," Bartholomew said.
The BoE's decision is one of many in a short period, with the Federal Reserve and the Bank of Japan both having left rates unchanged - as expected - and the ECB also being set to announce its latest policy decision Thursday.
Reporting by Sophie Kiderlin, editing by Alexandra Hudson
Source: Reuters