London open: Stocks edge lower as investors digest jobs data

London stocks edged lower in early trade on Tuesday as investors digested the latest UK jobs data.

At 0845 BST, the FTSE 100 was 0.2% lower at 7,137.02.

Figures out earlier from the Office for National Statistics showed that job vacancies hit a record high in May to July amid staff shortages in many industries.

Vacancies rose by 290,000 from the previous quarter to 953,000. This was a 168,000 increase compared to pre-pandemic levels between January and March 2020. Meanwhile, the unemployment rate in the three months to June ticked down 0.2 percentage points to 4.7%.

The data showed the number of payroll employees rose 182,000 to 28.9m in July. However, it remains 201,000 below pre-Covid levels. Average weekly pay growth rose to 8.8% in June from 7.4% in May, hitting the highest level since the series began in 2001 and coming in above the Bank of England’s forecast of 8.5%.

Jonathan Athow, deputy national statistician for economic statistics at the ONS, said: "The world of work continues to rebound robustly from the effects of the pandemic.

"The number of people on payroll was up again strongly and has now grown over half a million in the past three months, regaining about four-fifths of the fall seen at the start of the pandemic.

"As large parts of the economy started to reopen in recent months, the number of hours worked went past 1bn a week for the first time since the onset of the pandemic."

Ruth Gregory, senior UK economist at Capital Economics, said the rise in average weekly pay will fuel concerns on the Monetary Policy Committee (MPC) that higher CPI inflation will persist in 2022.

"Overall, we still think that the Bank of England won’t hike interest rates until mid-2023, rather than in mid-2022 as the markets expect. Today’s figures, however, suggest that the risks are tilted towards wage growth coming in a bit higher and the MPC raising rates a bit sooner than we anticipate."

Still to come on the macro front, market participants will eye the release of US retail sales figures for July at 1330 BST.

In equity markets, food delivery giant Just Eat Takeaway.com rose even as it posted an interim adjusted core earnings loss of €190m as it continued to invest in its businesses and said it had "reached the peak of absolute losses". The loss compares with a profit of €205m a year ago.

Online trading platform Plus500 rallied after it posted a dip in interim earnings and revenue as trading levels normalised, but said revenue for the year was set to be "significantly ahead" of current market forecasts.

BHP surged to the top of the FTSE 100 after agreeing to sell its petroleum business to Australia’s Woodside Petroleum and posting a 42% jump in full-year net profit.

Market Movers

FTSE 100 (UKX) 7,137.02 -0.24%
FTSE 250 (MCX) 23,606.72 -0.45%
techMARK (TASX) 4,758.57 -0.44%

FTSE 100 - Risers

BHP Group (BHP) 2,485.50p 8.99%
HSBC Holdings (HSBA) 407.65p 0.60%
Tesco (TSCO) 243.20p 0.45%
Evraz (EVR) 574.20p 0.35%
Rentokil Initial (RTO) 562.20p 0.32%
Admiral Group (ADM) 3,630.00p 0.28%
Croda International (CRDA) 9,048.00p 0.24%
Hikma Pharmaceuticals (HIK) 2,527.00p 0.20%
Scottish Mortgage Inv Trust (SMT) 1,323.00p 0.19%
Ocado Group (OCDO) 1,807.00p 0.17%

FTSE 100 - Fallers

Kingfisher (KGF) 356.20p -2.30%
Whitbread (WTB) 3,037.00p -2.03%
ITV (ITV) 118.20p -1.87%
M&G (MNG) 219.60p -1.66%
International Consolidated Airlines Group SA (CDI) (IAG) 161.76p -1.64%
Smiths Group (SMIN) 1,437.00p -1.61%
InterContinental Hotels Group (IHG) 4,516.00p -1.55%
Pearson (PSON) 766.00p -1.54%
Phoenix Group Holdings (PHNX) 662.00p -1.46%
NATWEST GROUP PLC ORD 100P (NWG) 214.40p -1.43%

FTSE 250 - Risers

Plus500 Ltd (DI) (PLUS) 1,496.50p 4.69%
Ferrexpo (FXPO) 393.20p 1.34%
JPMorgan American Inv Trust (JAM) 685.00p 1.33%
Polar Capital Technology Trust (PCT) 2,462.00p 0.82%
Indivior (INDV) 173.70p 0.81%
Pennon Group (PNN) 1,319.00p 0.76%
IP Group (IPO) 132.20p 0.76%
Worldwide Healthcare Trust (WWH) 3,680.00p 0.55%
Bodycote (BOY) 941.50p 0.53%
Vivo Energy (VVO) 105.00p 0.38%

FTSE 250 - Fallers

Harbour Energy (HBR) 330.20p -3.05%
Future (FUTR) 3,756.00p -2.95%
TUI AG Reg Shs (DI) (TUI) 313.90p -2.79%
Fidelity China Special Situations (FCSS) 343.00p -2.56%
Trainline (TRN) 345.00p -2.54%
Beazley (BEZ) 406.10p -2.17%
SSP Group (SSPG) 252.60p -2.09%
Shaftesbury (SHB) 625.50p -1.81%
Hammerson (HMSO) 35.22p -1.76%
Playtech (PTEC) 382.60p -1.65%