Sterling rose on Wednesday against the euro and was flat against the dollar after data showed wage growth picking up, reinforcing expectations of British interest rate hikes.
The Office for National Statistics data showed wage growth picking up to 4.1 percent in the three months to April from 3.9 percent the month before even though headline average earnings growth slowed.
The number of people claiming jobless benefits fell 12,000 in May, more than double the expected decline, while a fall in April was revised to a higher figure. The last time the unemployment rate was lower was May 1985.
This followed perceived hawkish comments from Bank of England Governor Mervyn King late on Monday, which have helped boost sterling.
"The comments from King were extremely important and the better than expected employment figures have added to interest rate expectations and supported sterling," said senior currency strategist Ian Stannard at BNP Paribas.
The Bank of England has raised rates by a quarter point four times since November. At 1429 GMT sterling traded nearly one percent higher on the day at 65.76 pence per euro.
It traded close to flat against the dollar at $1.8308 having earlier lost ground as the greenback rose against other currencies across the board on position adjustment after earlier dollar losses.