Pound Dips Against Dollar

LONDON (AFP) - Sterling was lower following the release of soft employment data and comments by Bank of England Monetary Policy Committee member Stephen Nickell that interest rates may not need to rise much further if economic data continues to be weak.

The market will be looking to this evening`s speech by MPC member Marian Bell to see whether she echoes this view, Steve Pearson, chief currency strategist at HBOS said Wednesday.

At 4:45pm, the pound was trading at 1.7775 dollars, down from 1.7866 at 1:05pm.

Official figures showed average earnings fell to their lowest level since last December due to a decline in bonus payments in July.

The decline in the number of people claiming the jobseeker`s allowance in August was also less than analysts had expected.

The data provides evidence that the labour market is becoming less tight, alongside recent surveys showing that the housing market is starting to cool and high street spending is finally on the wane, indicating that there is little room for further rate hikes.

Nevertheless, most analysts still expect one further rate hike in November, which would take the main repo rate to 5.0 percent.