LONDON- Expectations for volatility in the British pound plummeted to their lowest levels in more than a year on Tuesday after European Union leaders and the British government last week announced Brexit would be delayed for up to six months.

Sterling implied volatility gauges slipped across the board, extending a recent decline, to their lowest levels since January 2018, as no significant Brexit-related developments were expected this week.

Outside the drop in implied volatility measures in the currency derivatives markets, wider moves in the pound were limited with the British currency broadly steady despite robust jobs data. 

Total earnings, including bonuses, rose by an annual 3.5 percent in the three months to February, the Office for National Statistics said, matching the median forecast in a Reuters poll of economists. It was the joint highest rate since mid-2008.

"The encouraging data may fuel some confidence in sterling, however any significant movements will likely be muted as politics remains the key focus and we approach the Easter break,” said Sam Cooper, a vice president at Silicon Valley Bank.

The pound was broadly steady at $1.3089 against the dollar and flat against the euro at 86.36 pence.

Volatility in the pound has collapsed after EU and British lawmakers removed the risk of a no-deal Brexit last week, prompting traders who had hedged their sterling positions to unwind those bets.

But with the possibility of months of uncertainty in Britain as politicians struggle over how - or whether - to leave the EU, investors are broadly staying away from the pound.

Valentijn van Nieuwenhuijzen, CIO at NN Investment Partners which manages 246 billion euros ($278.13 billion) in assets, said he is steering clear on bets on the pound and only taking positions to hedge overall portfolio risks due to the political uncertainty.

Investor surveys also highlighted that uncertainty. A monthly survey by Bank of America Merrill Lynch found the UK was the least favoured region among global money managers with investors broadly underweight on UK stocks. 

($1 = 0.8845 euros)

(Reporting by Saikat Chatterjee, Editing by Tommy Wilkes and Ed Osmond) ((; +44-20-7542-1713; Reuters Messaging: