While economic data has assumed less importance in recent months as the scheduled Brexit departure date of March 29 approaches, investors were still keenly watching for signs of any more wage pressures in the labour market data.
Total earnings, including bonuses, rose by an annual 3.4 percent in the three months to December, remaining at its fastest pace since mid-2008, the Office for National Statistics said.
The increase was slightly below a forecast for a pick-up to 3.5 percent in a Reuters poll of economists.
Despite wage growth rising, markets have pared back their expectations for Bank of England monetary policy tightening this year given the uncertainty over the sort of Brexit Britain is headed for.
"The most recent data on the UK labour market continues to be strong on the whole, with the unemployment rate remaining close to a multi-decade low and another decent monthly rise seen in real wages," said David Cheetham, market analyst at online broker XTB.
"Looking at the bigger picture the pound remains range bound and is seemingly awaiting further clarity on Brexit before embarking on a sustained move, and therefore economic data remains in the back-seat for now," Cheetham added.
Sterling, trading up slightly before the data was released, fell marginally to $1.2919.
The pound was unchanged versus the euro at 87.53 pence per euro.
Concerns about Britain's economy were underscored by Japanese carmaker Honda's announcement on Tuesday that it would be closing its UK plant, leading to the loss of 3,500 jobs.
Honda said the decision was unrelated to Brexit.
With just six weeks until Britain is due to leave the bloc, Prime Minister Theresa May is yet to win the ratification of British lawmakers for her Brexit deal - and the nervousness about what happens is weighing on sterling.
British opposition Labour leader Jeremy Corbyn will on Tuesday urge the government to adopt his party's Brexit plan for a permanent customs union with the European Union, ahead of a visit to Brussels.
May and her government have repeatedly said membership of a customs union would prevent it having an independent trade policy - something they have promoted as one of the main economic benefits of leaving the bloc.
A group of seven Labour lawmakers quit the party on Monday, upset with Corbyn's leadership, in a move analysts said would at the margins weigh on the pound because it made the possibility that the Labour party would push for a second referendum less likely.