FTSE 100 rises after slip in unemployment stokes economic hopes and global stocks rebound goes on
08:21
London’s FTSE 100 is keeping its recovery on track in opening trade, helped by supportive-looking jobs data and a sustained rebound on Asian stock markets.
The main share index is up by over 30 points to 8241.28, a rise of around 0.4%. That kept it on course to head back to the 8283.36 mark at which it closed before three days of selling at the start of August. The drop took it as low as 7915.94 in intraday trade on August 5.
Today’s gains came after employment data pointed to signs of strength in the economy.
The UK’s unemployment rate for June fell to 4.2%, better than the reading of 4.5% expected and the 4.4% in the previous month.
And average earnings cooled, albeit by not as much as City experts had hoped. That fed into the outlook for interest rate cuts from the Bank of England. According to financial markets ,the chances narrowed of a total of three quarter-point cuts this year, culminating in December, – which would have left the base cost of borrowing at 4.75% by the end of the year.
Pound reclaims $1.28 after wages data slows but not by as much as City hoped
07:40 , Michael Hunter
The pound is rallying this morning after wages data looked stickier than the City hoped, playing into expectations on the pace of interest rate cuts from the Bank of England
An official readout on average earnings for June came in showing a rise of 5.4%, significantly above the 4.6% expected, albeit lower than the 5.8% in the previous month.
BOE policymakers have pledged to keep watch on rising wages as they assess the timing of their cuts, which started this month and took the base cost of borrowing down by a quarter-point to 5%. It took the cost of borrowing down from a 16-year peak.
Sterling rose 0.3% to $1.2805 after the numbers. It also rose against the euro, by 0.3% too, to €1.1712.
FTSE 100 set for gains after better-looking jobs data and Japan catch-up rally
07:25 , Michael Hunter
London’s FTSE 100 is on course to rise in opening trade, after better-looking jobs data at home a brisk catch-up rally in Japan helped to keep the mood brightening on global stock markets.
According to futures markets, the main UK stock index will gain around 30 points.
The UK’s unemployment rate for June fell to 4.2%, better than the reading of 4.5% expected and the 4.4% in the previous month.
But average earnings data was higher than forecast. It came in at 5.4% for June, higher than the 4.6% forecasts, but under the 5.8% last time around. The Bank of England – which started cutting interest rates this month, taking them down from a 16-year high of 5.25%, to 5% – will keep close watch for signs of sticky wage growth. Its long run of higher rates was designed to tame inflation.
Any FTSE 100 rally at the start of full trade would keep the index heading away from the nadir hit during the summer sell-off, sparked by worries about a recession in the US. The unease also followed an interest rate rise in Japan, leaving investors uneasy about the divergence there from the outlook for monetary policy around much of the rest of the world, where cuts are coming.
Tokyo’s recovery today added to a sense that the early August turmoil looked more like an over-reaction.
Recap: Yesterday’s top headlines
06:56 , Simon Hunt
Good morning from the Standard City desk.
Here’s a summary of our top headlines from yesterday: