Yahoo Finance FTSE 100 treads water as investors fret over UK unemployment
Investors found themselves in nervy territory this morning as they attempt to assess the rapidly changing picture of the Covid pandemic, its economic fallout and Brexit talks.
The FTSE 100 is expected to open three points higher at 6,029 with markets in Germany and France opening marginally lower.
Traders will be closely watching sterling, which has edged down 0.08 cents to $1.2860 overnight, after the Government’s controversial internal markets bill passed through the House of Commons by 77 votes amid tensions in the Tory party.
Unemployment figures, due at 7am, are likely to post a grim picture as the thousands of layoffs since lockdown lifted underscore the damage caused by the pandemic. Businesses in industries such as retail, aerospace, tourism and aviation have been among those to lay off huge proportions of their workforce.
CMC Markets analyst Michael Hewson said those job cuts could start to feed through into the official unemployment rate, which sat at 3.9% in the three months to June.
He said: “We could start to see that start of that today, with a move up to 4.1% for the three months to July, even if the numbers still don’t include those who have yet to return to work from furlough, and as such aren’t classified as unemployed quite yet.
“On the plus side at least two-thirds of those staff who were furloughed are now back at work, however the final 2m or so people may find they don’t have a job to go back to if current social distancing guidelines remain intact into next year, and the current furlough program due to run off next month.”
Investors will also be scouring a trading update from Ocado for signs of how well its joint venture with Marks & Spencer has performed since launching earlier this month after a 20-year partnership to sell Waitrose goods, alongside its own brand products, came to an end.
Ocado’s recent growth has been underscored by a 79% surge in the share price. The online grocer initially struggled to cope with a surge in demand for delivery slots in early lockdown but still enjoyed a surge in sales as shoppers opted to order food to their homes.
The group has been busy investing in warehouse and distribution space and technology for grocers around the world as it switches towards becoming a tech supplier and away from simply an online supermarket.
Updates are also due from pharmaceuticals business Vectura and plastic piping manufacturer Polypipe.
