Sterling hits 1-month low vs euro as UK wage growth slows

LONDON, Aug 12 (Reuters) - Sterling hit a one-month trough against a broadly higher euro on Wednesday, after data showed British wage growth slowed more than expected to hit its lowest in three months in June.

Growth in average weekly earnings in the three months to June fell to 2.4 percent on the year, slowing down from 3.2 percent in the three months to May and well below economists' forecasts of 2.8 percent in a Reuters poll.

Sterling fell by over 1 percent against the single currency to 71.70 pence, its weakest since July 13, from 71.44 pence per euro before the data. The euro was also lifted by lower U.S (Other OTC: UBGXF - news) . Treasury yields and an unwinding of euro-funded positions on the Chinese yuan after a second devaluation.

Against a weaker dollar, sterling edged down 0.1 percent on the day, to trade at $1.5559, compared with $1.5594 before the labour market data.

British government bond prices rose modestly after the data and underperformed against German debt. The premium that 10-year gilts offers over the equivalent Bund narrowed around a basis point to 115.5, its smallest since June 15. (Reporting by Jemima Kelly; and Andy Bruce)