London midday: Stocks stay down as investors digest jobs data

London stocks were still weaker by midday on Tuesday as investors mulled the latest UK jobs data.

The FTSE 100 was down 0.5% at 8,227.11.

Figures released earlier by the Office for National Statistics showed pay growth cooled in the three months to July, while the unemployment rate fell to a six-month low.

The unemployment rate declined to 4.1% from 4.2% in the previous three months, in line with economists’ expectations.

Meanwhile, growth in average earnings fell to 5.1%, hitting a two-year low. Annual growth including bonuses was 4%.

The data also showed that in June to August, the estimated number of vacancies fell by 42,000 on the quarter to 857,000. This marked the 26th consecutive quarterly decline but still left vacancies above pre-Covid levels.

Estimates for payrolled employees were down 6,000 between June and July, but rose by 203,000 on an annual basis.

Liz McKeown, director of economic statistics at the ONS, said: "Growth in total pay has slowed markedly again as one-off payments made to many public sector workers in June and July last year continue to affect the figures.

"Basic pay growth also continued to slow, though less sharply.

"When taken together on a comparable basis, our different measures all show growth in the number of employees over the latest quarter, though annual growth has slowed over the year.

"Meanwhile, there was a decrease in the number of self-employed people and a fall in both those looking for a job and not looking for or available to start working."

Russ Mould, investment director at AJ Bell, said: "The latest UK jobs fires suggest a labour market which, like a newly baked cake set in front of a group of kids, is cooling, but not quite as fast as the Bank of England might want in order to press the accelerator on rate cuts.

"UK wage growth fell to its lowest level since the quarter to July 2022 but, even in real terms, pay is still up considerably more than the Bank’s 2% inflation target. Although most of the data was in line with expectations, a tick lower in the unemployment rate and a much bigger increase in the number of people in employment does hint at some continuing tightness in the jobs market. This leaves the Bank’s decision making finely balanced ahead of its meeting next week.

"The ONS acknowledges some volatility around its numbers and this is not the only jobs data out this week with the accountancy group BDO releasing data suggesting August was the worst month for the UK labour market since 2013.

"Another significant takeaway from today’s ONS report is the 4% increase in overall wages which will feed into the uplift in the state pension. The increase will be less than pensioners have seen in recent years."

Investors were also mulling the latest research from Kantar, which showed that grocery price inflation declined to 1.7% in the four weeks to 1 September from 1.8% in the previous four-week period.

Kantar said that despite the drop, nearly 60% of households remain worried about the rising cost of their shopping.

Fraser McKevitt, head of retail and consumer insight at Kantar, said: "This is their second biggest financial worry, only behind home energy bills.

"Retailers have been doing their bit to help shoppers keep the cost of the weekly shop down, and the proportion of sales on promotion increased year-on-year for the sixteenth month in a row in August. More than half of all grocery trips include some kind of deal, and this proportion rises as the trolley gets bigger."

In equity markets, gold miner Centamin surged after it agreed to be taken over by AngloGold Ashanti in a £1.9bn deal.

Under the terms of the transaction, Centamin shareholders will receive 0.06983 new AngloGold Ashanti shares and $0.125 in cash. The price represents a premium of around 36.7% to the closing share price on Monday.

Fresnillo, Hochschild Mining and Endeavour also gained.

Wickes rallied as it posted a drop in interim profit as revenues fell, but backed its profit expectations for the year and said trends were improving.

On the downside, AstraZeneca slid after mixed results from one of its key lung cancer trials.

Alpha Group tumbled as it said Morgan Tillbrook had decided to step down as chief executive on 31 December. He will be succeeded by Clive Kahn, who has been chairman since 2016, and who will be appointed as CEO from 1 January 2025.

Market Movers

FTSE 100 (UKX) 8,227.11 -0.53%
FTSE 250 (MCX) 20,684.71 0.16%
techMARK (TASX) 4,845.60 -0.20%

FTSE 100 - Risers

JD Sports Fashion (JD.) 139.35p 2.58%
Fresnillo (FRES) 515.00p 2.08%
Pershing Square Holdings Ltd NPV (PSH) 3,556.00p 1.43%
Unite Group (UTG) 964.00p 1.37%
Entain (ENT) 682.20p 1.34%
easyJet (EZJ) 487.00p 1.06%
Persimmon (PSN) 1,610.50p 1.00%
Vistry Group (VTY) 1,358.00p 0.97%
Flutter Entertainment (DI) (FLTR) 16,770.00p 0.72%
CRH (CDI) (CRH) 6,438.00p 0.72%

FTSE 100 - Fallers

AstraZeneca (AZN) 12,152.00p -4.41%
Hikma Pharmaceuticals (HIK) 1,901.00p -2.21%
Centrica (CNA) 120.05p -2.00%
B&M European Value Retail S.A. (DI) (BME) 418.40p -1.46%
Smith (DS) (SMDS) 452.20p -1.27%
Burberry Group (BRBY) 567.80p -1.25%
Smurfit Westrock (DI) (SWR) 3,405.00p -1.22%
Pearson (PSON) 1,046.50p -1.13%
Convatec Group (CTEC) 231.00p -1.11%
Rightmove (RMV) 655.60p -1.03%

FTSE 250 - Risers

Centamin (DI) (CEY) 149.40p 25.02%
Bridgepoint Group (Reg S) (BPT) 328.80p 4.12%
Hochschild Mining (HOC) 170.60p 4.02%
Baltic Classifieds Group (BCG) 291.50p 2.64%
International Workplace Group (IWG) 174.50p 2.29%
Senior (SNR) 163.80p 2.12%
Endeavour Mining (EDV) 1,591.00p 1.99%
Direct Line Insurance Group (DLG) 184.40p 1.88%
Travis Perkins (TPK) 873.50p 1.87%
Hill and Smith (HILS) 2,040.00p 1.75%

FTSE 250 - Fallers

Alpha Group International (ALPH) 2,020.00p -14.04%
Indivior (INDV) 742.50p -4.19%
W.A.G Payment Solutions (WPS) 78.40p -2.49%
Bakkavor Group (BAKK) 157.50p -2.17%
Ithaca Energy (ITH) 104.90p -2.15%
Bloomsbury Publishing (BMY) 676.00p -2.03%
CMC Markets (CMCX) 310.00p -1.90%
PureTech Health (PRTC) 146.00p -1.75%
Just Group (JUST) 134.00p -1.62%
Auction Technology Group (ATG) 374.00p -1.58%