The Office for National Statistics also said the number of people in work grew by 168,000 in the three months to January. A Reuters poll of economists had pointed to a much smaller rise of 84,000.

Sterling extended gains after the data to hit the day's highs at $1.4066, up nearly half a percent on the day. Before the data, sterling was up nearly a quarter of a percent thanks to a struggling dollar.

Against the euro, sterling also hit the day's highs and traded up 0.25 percent at 87.25 pence. Britain's blue chip FTSE 100 index extended losses very slightly, last down 0.4 percent.

British government bond futures fell more than 30 ticks after the data, pushing two-year government bond yields 5 basis points higher on the day to 0.936 percent, their highest since May 2011, according to Tradeweb data.