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What to Watch: UK jobs report, stocks rally, expectations for long Brexit extension

Alanna Petroff
Senior Economics Correspondent at Yahoo Finance UK

Here are some of the top business, market, and economic stories you should be watching today in the UK, Europe, and abroad:

UK unemployment drops to 44-year low

British employers ramped up their hiring at the fastest pace in more than three years during the three-month period from November 2018 to January 2019, according to new data published Tuesday morning by the UK’s Office for National Statistics (ONS).

The number of people in work surged by 222,000, pushing the unemployment rate down to 3.9%, its lowest level in 44 years.

The tight labour market has supported wage growth as companies try to retain their workers, while also recruiting new hires.

Average weekly earnings were up 3.4% in the three-month period compared to the same time last year, according to the ONS. Once you factor in inflation — which eats into people’s earnings — workers were making about 1.5% more compared to last year.

UK unemployment is now at a 44-year low. Photo: Richard Pohle/Getty Images

Expectations for a long Brexit extension

Strategists, analysts, and traders are still digesting the decision by parliament speaker John Bercow to block a new vote on prime minister Theresa May’s Brexit deal in the House of Commons.

The decision has led many to predict the move will force the UK to request a long Brexit extension from the European Union this week, delaying the divorce well past the 29 March deadline.

The Bercow decision slammed the UK pound (GBPUSD=X, GBPEUR=X) on Monday afternoon, but sterling has since recovered lost ground.

“The predominant notion adopted by the market is that, as long as the worst case scenario of hard Brexit is avoided by delaying Brexit, the pound is a buy on dips,” Rabobank strategists said in a research note.

READ MORE: Brexit extension will still be painful for the UK economy

European stock market overview

European stock markets were rising on Tuesday morning and Britain’s FTSE 100 (^FTSE) continued its winning streak as oil giants and miners boosted the index.

Shares in Ocado (OCDO.L) climbed to an all-time high after the company posted better-than-expected first-quarter retail sales.

Investors are also keeping tabs on the two-day US Federal Reserve meeting that begins Tuesday.

US stock futures were pointing up ahead of the opening bell.