London open: Stocks rise after UK jobs data, ahead of US inflation

London stocks edged higher in early trade on Tuesday as investors mulled the latest UK jobs data - which showed that wage growth eased - and looked ahead to a key US inflation reading and a string of central bank policy announcements this week.

At 0830 GMT, the FTSE 100 was up 0.3% at 7,570.88, following positive sessions in the US and Asia.

Richard Hunter, head of markets at Interactive Investor, said: "Wall Street finished higher once more, continuing the momentum which is fuelling hopes of a Santa rally until the year end.

"Hurdles still remain which could derail sentiment, and many of those are due to be revealed this week. The consumer price index reading is due later today, where it is expected that inflation will have continued to cool, while critically remaining in excess of the Federal Reserve’s target of 2%. At the headline level, the figure is expected to reduce to 3.1% from 3.2% in October, with core inflation steadying at 4%.

"The producer price index reading will follow tomorrow, revealing the path of inflation at the wholesale level, which is also expected to show a further easing. Either of these inflation readings have the potential to upset the investment applecart, with any unexpected strength in the numbers likely to add to the debate of when the Fed will begin to consider lowering rates next year. The current consensus points towards the first cut coming in May, but this is likely to fluctuate depending on the economic data."

The latest policy announcement from the Fed is due on Wednesday, followed by the Bank of England and the European Central Bank on Thursday.

On home shores, figures released earlier by the Office for National Statistics showed that the amount of people out of work remained unchanged in October, while wage growth cooled.

The unemployment rate was largely unchanged in the three months to October, at 4.2%. Also largely unchanged was the economic inactivity rate, at 20.9%.

Annual growth in total pay was 7.2%, or 7.3% once bonuses were stripped out. That compares to last month’s growth of 7.7% and was a smaller increase than analysts had been expecting, with consensus for 7.5% growth in regular pay.

Once adjusted for inflation, annual total pay rose by 1.3% and regular pay by 1.4%.

The number of vacancies, meanwhile, fell by 45,000 in September to 949,000 in the September to November period.

It is the seventeenth consecutive period that vacancies have fallen, making it the longest unbroken run of quarterly falls ever recorded.

A total of 30.2m people were payrolled employees in November, down 13,000 on October’s revised figure.

In equity markets, AstraZeneca gained as it agreed to buy US vaccine maker Icosavax for up to $1.1bn.

Miners were in the black following heavy losses in the previous session, with Rio, Antofagasta and Glencore all sharply higher.

On the downside, Hargreaves Lansdown and AJ Bell tumbled after the Financial Conduct Authority said it had written to investment platforms and SIPP operators setting out its concerns about how they deal with any interest earned on customers’ cash balances.

BT Group was also under the cosh after Ofcom proposed to ban inflation-linked mid-contract price rises.

Market Movers

FTSE 100 (UKX) 7,570.88 0.34%
FTSE 250 (MCX) 18,750.14 0.00%
techMARK (TASX) 4,150.01 0.36%

FTSE 100 - Risers

Rio Tinto (RIO) 5,568.00p 1.53%
Antofagasta (ANTO) 1,557.50p 1.40%
Pershing Square Holdings Ltd NPV (PSH) 3,296.00p 1.10%
Glencore (GLEN) 444.00p 1.07%
Diageo (DGE) 2,837.50p 1.00%
AstraZeneca (AZN) 10,194.00p 0.97%
Burberry Group (BRBY) 1,512.00p 0.97%
Rightmove (RMV) 586.60p 0.86%
Endeavour Mining (EDV) 1,714.00p 0.82%
BAE Systems (BA.) 1,051.00p 0.82%

FTSE 100 - Fallers

Hargreaves Lansdown (HL.) 717.40p -6.25%
BT Group (BT.A) 126.60p -3.62%
Vodafone Group (VOD) 67.81p -1.08%
Standard Chartered (STAN) 640.20p -1.05%
St James's Place (STJ) 686.40p -0.90%
Severn Trent (SVT) 2,692.00p -0.70%
Admiral Group (ADM) 2,779.00p -0.68%
NATWEST GROUP (NWG) 217.50p -0.64%
Lloyds Banking Group (LLOY) 45.84p -0.61%
United Utilities Group (UU.) 1,101.00p -0.59%

FTSE 250 - Risers

Virgin Money UK (VMUK) 158.50p 3.53%
International Distributions Services (IDS) 250.60p 3.47%
Rotork (ROR) 328.80p 2.30%
Just Group (JUST) 87.00p 1.75%
Spectris (SXS) 3,572.00p 1.65%
Wetherspoon (J.D.) (JDW) 764.50p 1.53%
Morgan Advanced Materials (MGAM) 269.00p 1.51%
Investec (INVP) 507.20p 1.50%
NCC Group (NCC) 122.80p 1.49%
Mercantile Investment Trust (The) (MRC) 214.50p 1.42%

FTSE 250 - Fallers

AJ Bell (AJB) 290.20p -6.87%
Volution Group (FAN) 385.20p -5.31%
Trainline (TRN) 273.00p -4.75%
Bridgepoint Group (Reg S) (BPT) 237.00p -4.59%
888 Holdings (DI) (888) 81.00p -3.57%
Future (FUTR) 577.50p -2.78%
Abrdn (ABDN) 176.20p -2.65%
Petershill Partners (PHLL) 151.40p -2.57%
Helios Towers (HTWS) 70.00p -2.51%
Pets at Home Group (PETS) 302.00p -2.45%