London midday: FTSE stays down after UK jobs data

London stocks were still in the red by midday on Tuesday as the latest UK jobs data made it even more likely the Bank of England will hold rates this week.

The FTSE 100 was down 0.7% at 8,202.14.

Figures released earlier by the Office for National Statistics showed the unemployment rate was steady in the three months to October, while pay growth picked up.

The unemployment rate came in at 4.3%, unchanged from the previous month.

Meanwhile, average pay, including and excluding bonuses, rose 5.2% per year. This compares to 4.9% growth for regular earnings in the previous three months, and 4.4% for total earnings.

The data also showed that vacancies fell by 31,000 on the quarter to 818,000 in September to November 2024. This marked 29 months of consecutive falls but they are still higher than before the pandemic.

Liz McKeown, director of statistics at the ONS, said: "After slowing steadily for over a year, growth in pay excluding bonuses increased slightly in the latest period, driven by stronger growth in private sector pay. Pay growth including bonuses increased by more, but this reflects previous figures being affected by the one-off payments made to some public sector employees in 2023.

"The number of people on payrolls grew slightly in October, but we have seen annual growth rates continue to slow, showing a consistent trend with our latest jobs data from employers. The number of job vacancies has also fallen again, though the total remains a little above where it was before the pandemic."

Private sector pay growth rose from 4.9% to 5.4%.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: "Adjusted for inflation, real wages continued to climb, but the stronger print has all but assured the Bank of England will hold rates steady on Thursday, with markets pricing in a 93% chance of no change.

"Investors are now in wait-and-see mode, watching whether the labour market cools in the wake of the Budget, with February’s rate cut prospects looking like a coin toss."

In equity markets, Bunzl slid as it said volume growth in the third quarter was expected to continue in the fourth, although deflation was likely to be more persistent than previously anticipated. The company said this was expected to have a "slight" impact on group adjusted operating profit in 2024, driven by Continental Europe.

Oil giants BP and Shell both gushed lower as oil prices fell.

Tullow Oil fell sharply after Kosmos Energy said it does not plan to make an offer for the oil and gas exploration company. Kosmos did not provide any reasons for its decision, saying simply that it does not intend to make an offer "at this time".

Chemring slid despite the UK defence and aerospace contractor reporting a record order book amid global political tensions and the war in Ukraine.

Capita tumbled as the outsourcer reported an 8% drop in revenue for the 11 months to 30 November due to contract losses. It also said it was lifting its cost savings target to £250m by December 2025 from £160m and plans to increase the use of AI and generative AI.

On the upside, Britvic ticked higher after Carlsberg's purchase of the soft drinks maker was given the green light by the UK’s competition regulator.

LSE Group was a touch firmer after UBS raised its stance on the stock to ‘buy’ from ‘neutral’.

Market Movers

FTSE 100 (UKX) 8,202.14 -0.73%
FTSE 250 (MCX) 20,598.98 -1.03%
techMARK (TASX) 4,621.33 -0.75%

FTSE 100 - Risers

Standard Chartered (STAN) 1,001.50p 1.02%
Flutter Entertainment (DI) (FLTR) 21,850.00p 0.69%
International Consolidated Airlines Group SA (CDI) (IAG) 298.20p 0.61%
Ashtead Group (AHT) 5,160.00p 0.51%
Sage Group (SGE) 1,305.50p 0.50%
Compass Group (CPG) 2,668.00p 0.49%
Rentokil Initial (RTO) 407.70p 0.42%
Pershing Square Holdings Ltd NPV (PSH) 3,902.00p 0.41%
London Stock Exchange Group (LSEG) 11,560.00p 0.39%
CRH (CDI) (CRH) 7,766.00p 0.31%

FTSE 100 - Fallers

Bunzl (BNZL) 3,322.00p -6.63%
Hikma Pharmaceuticals (HIK) 1,871.00p -3.46%
Marks & Spencer Group (MKS) 388.50p -2.29%
Berkeley Group Holdings (The) (BKG) 3,886.00p -2.26%
BT Group (BT.A) 146.40p -2.17%
Coca-Cola HBC AG (CDI) (CCH) 2,718.00p -1.95%
JD Sports Fashion (JD.) 97.06p -1.94%
Diageo (DGE) 2,550.50p -1.90%
B&M European Value Retail S.A. (DI) (BME) 356.80p -1.79%
Severn Trent (SVT) 2,546.00p -1.77%

FTSE 250 - Risers

Burberry Group (BRBY) 989.40p 3.84%
Aston Martin Lagonda Global Holdings (AML) 103.60p 3.60%
AO World (AO.) 108.80p 2.45%
PPHE Hotel Group Ltd (PPH) 1,355.00p 1.50%
Elementis (ELM) 141.40p 1.00%
Britvic (BVIC) 1,305.00p 0.85%
Twentyfour Income Fund Limited Ord Red (TFIF) 107.60p 0.75%
Allianz Technology Trust (ATT) 421.00p 0.72%
SDCL Energy Efficiency Income Trust (SEIT) 55.00p 0.55%
Wizz Air Holdings (WIZZ) 1,482.00p 0.54%

FTSE 250 - Fallers

Chemring Group (CHG) 325.50p -9.96%
W.A.G Payment Solutions (WPS) 78.40p -6.44%
Wood Group (John) (WG.) 66.10p -4.27%
International Workplace Group (IWG) 152.00p -3.80%
Keller Group (KLR) 1,470.00p -3.67%
Morgan Sindall Group (MGNS) 3,705.00p -3.39%
Genuit Group (GEN) 386.00p -3.38%
Indivior (INDV) 918.50p -3.32%
Harbour Energy (HBR) 243.40p -3.22%
Serco Group (SRP) 136.60p -2.91%