The UK’s jobs market continues to show resilience after a smaller-than-expected rise in the claimant count figure for October.
The 3,300 increase was accompanied by an unemployment rate of 3.6%, which compares with 3.5% the previous month.
The Office for National Statistics also revealed that August and September saw well over half a million working days lost to strikes, the highest two-month total in more than a decade.
FTSE 100 in a sour spot as domestic economic woes and pressure on dollar earners take a toll
16:43 , Michael Hunter
The UK’s main stock index took a hit from a blend of domestic economic woes and pressure for dollar earners as the US currency fell further while investors continued to eye softer US rate rates and gloomy UK data.
The FTSE 100 fell 25 points to 7360.64, a loss of 0.3%. It left London missing out on modest rises across Europe and a stronger advance in New York, as the general mood on global markets improved after more softening US inflation data looked to keep the way open for smaller rate hikes from the Federal Reserve.
That also put the dollar under pressure, curtailing its advance over the wider year which came in line with expectations for more agressive action from the Fed. As the outlook shifted further, the index tracking the dollar against a range of alternatives fell 0.4% to 106.3.
The pound rose quickly, at one point re-taking the $1.20 mark for the first time since the summer. It came off the highest levels of the day into afternoon trade, but stayed up over 1.2% at just under $1.19.
Vodafone fell almost 8% to 96p, a decile of 8p. Fresnillo, the silver miner, lost 3% or 26p to 853p.
In a busy week for insight into the UK economy, pay data revealed a real-terms drop in comes amid rising inflation and the national jobless rate started to creep higher with the country on the brink of recession. It left domestic stocks also looking exposed. J Sainsbury fell almost 2% or over 4p to 216p. B&M Value, the cut-price retailer was down 12p or 3% to 392p.
The FTSE 250, home to a range of companies rooted in the UK economy, fell180 points, or, 0.9% to 19,442.87.
Wall Street stock light up after more reassuring inflation data as the dollar slumps
14:59 , Michael Hunter
Deepening hopes that easing inflation will mean that US rate rises could come in softer steps lifted Wall Street stocks in early trade.
The S&P 500 strode 55 points higher to 4012.90. a rise of 1.4%. It came after the Producer Price Index for October held steady, having been expected to rise by 0.3%, with some of the biggest-name consumer stocks prominent on the leaderboard. Walmart rose almost 7% and Paramount was up over 6%.
The dollar took a knock as the outlook for Federal Reserve interest rate hikes focused on the potential for smaller increases as the signs grew that policy makers’ fight against inflation was starting to work. The index tracking the currency against a range of alternatives slipped 0.5% to 106.14. The pound was up 1.5% at $1.1932, having earlier retaken the $1.20 mark. It left sterling at its strongest level against the dollar since mid August.
New York stocks expected to rally after more signs of easing US inflation
13:52 , Michael Hunter
More softer-than-expected inflation numbers in the US have given Wall Street stock futures a boost.
The S&P 500 looks set for a gain of around 80 points, or 2%, after the Producer Price Index was flat for October. That followed a drop in the Consumer Price Index, which led to expectations for smaller interest rate rises from the Federal Reserve.
Steady producer prices make it more likely that consumer prices continue to drop, and underline makes expectations that the US central bank will be able to adopt smaller interest rate rises, and maybe even a lower peak to borrowing costs.
That would be positive for stock market investors and also eases concern about the extent of the danger posed to economic growth by rising rates.
Pound reclaims $1.20 as more signs of easing US inflation hit the dollar on outlook for softer Fed rate hikes
13:41 , Michael Hunter
The dollar took another hit on further signs of easing inflation in the US, which looked to increase the chances of smaller rate rises from the Federal Reserve.
The index tracking the currency against a series of alternatives fell 0.4% to 106.73 as it fell across the board, limiting its wider rally over the year, power by the Fed’s hikes, to 12%
It helped the pound extend its rebound, taking it back over $1.20. Sterling was up over 2% to $1.2004, a level last seen in mid-August.
The moves came after producer price inflation held steady in October, reading 0.0%, defying expectations that it would rise by 0.3%.
Pound nears $1.19 at strongest level against the dollar since August
13:27 , Michael Hunter
The pound was trading around a two-and-a-half month high near $1.19 in the run to to the start of US trade, with the dollar weakening as investors continued to re-draw their expectations for Federal Reserve rate rises,
Sterling was up 1.2% at $1.1885, its highest level since late August. The wider trend for a weaker dollar faced a test from producer price inflation data, which could help shape the outlook for the Consumer Price Index, which it feeds into. A softer-than-expected CPI reading led to the start of the drop in the dollar last week, after it was taken as a sign the Fed’s fight against inflation was kicking in.
BAE shares resume rally, Centrica leads FTSE 100
10:03 , Graeme Evans
Shares in BAE Systems are up 4% after the defence giant highlighted how this year’s surge in orders is set to boost longer term prospects.
The blue-chip stock rose 30p to 756.2p after chief executive Charles Woodburn reiterated 2022 guidance and signalled another year of growth and margin expansion in 2023.
The period of heightened global defence spending means BAE has racked up £28 billion of orders this year, including £10 billion so far in the second half.
Deals include today’s £4.2 billion contract to manufacture the next five City Class Type 26 frigates for the Royal Navy in Glasgow. The move sustains more than 4,000 BAE jobs and supports shipbuilding facilities in Scotland into the 2030s.
BAE pointed out today: “Contracts secured now will be executed and traded for many years to come providing us with long-term growth visibility.”
These defensive qualities ensured that BAE’s shares got a fresh wave of support, having fallen from last month’s record high of 856p to 715p on Friday.
BAE was beaten to the top of the FTSE 100 risers board by British Gas owner Centrica, which surged 3.4p to 86.9p during a strong session for power generation firms.
SSE also lifted 28.5p to 1660.5p after the Financial Times reported that chancellor Jeremy Hunt’s windfall tax plans will focus on excess returns rather than an industry revenue cap.
The FTSE 100 index stood 9.41 points higher at 7394.58, but the FTSE 250 dropped 55.80 points to 19,566.45 as investors dumped some of last week’s strongest performing stocks. Currys fell 2.85p to 82.15p and Moonpig lost 6.6p to 173.7p.
US market falls back, FTSE 100 seen lower
07:56 , Graeme Evans
The S&P 500 index closed almost 1% lower last night, putting back some of the 6.5% improvement seen over the previous two sessions.
Cyclical sectors led Wall Street’s decline as relief at last week’s softer-than-expected US inflation figure began to fade, causing an upward move in government bond yields.
The FTSE 100 index rallied 0.9% yesterday thanks to the support of GSK and AstraZeneca, but CMC Markets expects the top flight to open 10 points lower at 7375.
More people quit workforce, days lost to strikes at decade high
07:40 , Graeme Evans
The proportion of people neither working nor looking for work has risen again to 21.6%, according to today’s jobs market report.
The Office for National Statistics said the biggest contributor for this trend in the most recent quarter came from younger age groups, having previously been driven by older people not returning to the workforce after the pandemic.
Job vacancies have continued to fall back from their recent peak, with increasing numbers of employers telling the ONS that economic pressures are a factor in their decision to hold back on recruitment.
On the wages front, average pay excluding bonuses fell by 2.7% in the year to July to September when factoring in inflation.
With earnings falling in real terms, August and September saw well over half a million working days lost to strikes. This is the highest two-month total in more than a decade, with the vast majority coming from the transport and communications sectors.