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UK earnings growth is speeding up

Official figures show that average earnings growth in Britain picked up by more than expected in the three months to January.

The Office for National Statistics said average earnings rose by 4.2% in the period, up from 4% in the three months to December and above expectations for a 4.1% increase.

Stripping out bonuses, however, earnings growth eased to 3.6% in the three months to January from 3.7% in the previous three-month period.

The Bank of England has been worried that workers would demand higher wages in the January pay round to offset rising energy and living costs which could fuel already above-target inflation.

Meanwhile, the numbers claiming unemployment benefit fell for a fifth consecutive month in February, but by less than expected, dipping by 3,800 against forecasts for a drop of 8,000.

The internationally-recognised ILO jobless rate remained steady at 5.5% in the three months to January.