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London open: Stocks edge lower after UK jobs data, ahead of US CPI

(Sharecast News) - London stocks edged lower in early trade on Tuesday as investors mulled the latest UK jobs data and looked ahead to a key US inflation reading. At 0840 GMT, the FTSE 100 was down 0.2% at 7,557.55.

According to the Office for National Statistics, the UK unemployment rate eased at the end of last year, while average earnings continued to rise.

The unemployment rate was 3.8% for those aged 16 and over in the three months to December. That was down on November's rate of 4.2% and below consensus for 4.0%.

The economic inactivity rate was 21.9%, up from 20.9% in November. The ONS said the increase was driven by the number of people who are long-term sick, which remains at "historically" high levels.

The claimant count for January increased by 14,100 on the month, or by 61,200 on the year, to 1.579m. The employment rate was 75.0%.

Vacancies, meanwhile, fell by 26,000 in the quarter to 932,000. It is the nineteenth consecutive month vacancies have fallen, although they still remain above pre-pandemic levels.

Wage growth beat forecasts. Annual growth in employees' average regular earnings, excluding bonuses, was 6.2%, in contrast to consensus for 6.0%. Including bonuses, wages grew by 5.8%.

Both measures were down on November, however, when total pay rose by 6.7% and regular pay by 6.6%

Annual growth in real terms, which is adjusted for inflation, for total pay in December was 1.4% and 1.8% for regular pay.

A total of 108,000 working days were lost in December because of labour disputes.

The ONS is currently changing its methodology, after too few people responded to the surveys. It therefore noted that Labour Force Survey estimates should be treated with "additional caution" because of the smaller sample sizes.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "Wage growth in the UK is cooling but may still be hot to handle for the Bank of England policymakers who may keep their distance from rate cuts for a little bit longer.

""The FTSE 100 has opened in the red, as investors assess there is still considerable way to go before stubborn inflation has been tamed. Inflation busting pay rises are still the norm, and there is concern that if staff costs stay high, businesses will be more reluctant to stem price increases. There were buds of hope of an interest rate cut in May, but they may now be pruned back, depending what Wednesday's CPI data reveals about broader price pressures."

Still to come on the macro front, the US consumer price index for January is due at 1330 GMT.

In equity markets, travel firm TUI rallied as it reported a positive quarterly underlying profit for the first time after a record performance in the first quarter, and reiterated its guidance for the full year.

The company booked underlying earnings before interest and tax of €6m for the three months to 31 December, moving into the black for the first time since the merger of TUI AG and TUI Travel PLC in 2014.

Group revenues were up 15% year-on-year at €4.3bn, driven by higher demand at improved rates and prices, the company said.

Aston Martin Lagonda rose after executive chairman Lawrence Stroll confirmed the luxury car maker is in talks with bankers to address a looming debt pile, with the company's near-term liabilities amounting to around $1.4bn.

In broker note action, GSK gained after an upgrade to 'buy' from 'neutral' at Citi.

Market Movers

FTSE 100 (UKX) 7,557.55 -0.21% FTSE 250 (MCX) 19,138.15 -0.34% techMARK (TASX) 4,375.23 -0.30%

FTSE 100 - Risers

AstraZeneca (AZN) 9,614.00p 1.19% Endeavour Mining (EDV) 1,334.00p 0.83% GSK (GSK) 1,638.20p 0.73% Severn Trent (SVT) 2,507.00p 0.48% Glencore (GLEN) 396.00p 0.44% Fresnillo (FRES) 495.50p 0.43% Anglo American (AAL) 1,757.60p 0.34% Rio Tinto (RIO) 5,369.00p 0.26% Shell (SHEL) 2,502.00p 0.26% National Grid (NG.) 1,004.50p 0.25%

FTSE 100 - Fallers

Diploma (DPLM) 3,322.00p -1.89% Scottish Mortgage Inv Trust (SMT) 793.60p -1.64% 3i Group (III) 2,370.00p -1.62% Ocado Group (OCDO) 528.20p -1.60% Intertek Group (ITRK) 4,351.00p -1.47% CRH (CDI) (CRH) 5,788.00p -1.46% M&G (MNG) 218.10p -1.45% Experian (EXPN) 3,333.00p -1.39% Melrose Industries (MRO) 586.00p -1.35% Spirax-Sarco Engineering (SPX) 10,025.00p -1.33%

FTSE 250 - Risers

TUI AG Reg Shs (DI) (TUI) 597.50p 3.11% Ruffer Investment Company Ltd Red PTG Pref Shares (RICA) 269.50p 1.70% Aston Martin Lagonda Global Holdings (AML) 177.00p 1.61% Diversified Energy Company (DEC) 920.00p 1.38% Tullow Oil (TLW) 31.50p 1.22% W.A.G Payment Solutions (WPS) 89.00p 1.14% HarbourVest Global Private Equity Limited A Shs (HVPE) 2,375.00p 1.06% UK Commercial Property Reit Limited (UKCM) 68.00p 1.04% JPMorgan Japanese Inv Trust (JFJ) 511.00p 0.99% Baillie Gifford Japan Trust (BGFD) 746.00p 0.95%

FTSE 250 - Fallers

Close Brothers Group (CBG) 402.80p -5.31% Spirent Communications (SPT) 115.00p -3.77% Chemring Group (CHG) 350.00p -2.37% Mitchells & Butlers (MAB) 240.80p -2.27% Volution Group (FAN) 426.20p -2.11% Allianz Technology Trust (ATT) 333.50p -1.91% Bodycote (BOY) 609.00p -1.85% Vesuvius (VSVS) 468.60p -1.84% Wetherspoon (J.D.) (JDW) 794.00p -1.79% Smithson Investment Trust (SSON) 1,381.00p -1.78%

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Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.

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