London pre-open: Stocks seen down ahead of US inflation; UK jobs data in focus

London stocks were set to fall at the open on Tuesday as investors eyed the latest US inflation reading and mulled UK jobs data.

The FTSE 100 was called to open down around 10 points at 7,416.

Figures released earlier by the Office for National Statistics showed that wage growth eased in the three months to September, but earnings growth outstripped inflation, while the unemployment rate was unchanged.

Average wage growth including bonuses fell to 7.9 cent from an upwardly-revised 8.2.% the month before. This compares to inflation of 6.7%. Economists were expecting wage growth including bonuses to fall to 7.4%.

Excluding bonuses, wage growth eased to 7.7% in the three months to September, from 7.8%. The unemployment rate was steady at 4.2%.

ONS director of economic statistics, Darren Morgan, said: "Our labour market figures show a largely unchanged picture, with the proportions of people who are employed, unemployed or who are neither working nor looking for a job all little changed on the previous quarter.

"The number of job vacancies fell for the 16th straight month. Nevertheless, vacancies still remain well above their pre-pandemic levels.

"With inflation easing in the latest quarter, real pay is now growing at its fastest rate for two years."

Looking ahead to the rest of the day, market participants were awaiting the release of the US consumer price index for October at 1330 GMT.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: "For today, an inflation read in line with expectations, or ideally softer than expected, should give further support to the Federal Reserve (Fed) doves, cement the idea that the Fed is done hiking the interest rates and boost the rate cut expectations for next year.

"A read above expectations should bring Fed hawks back to the market and increase the bets of a rate hike in December. But activity on Fed funds futures gives around 85% chance for a no rate hike in the Fed’s December meeting, and the inflation numbers must look very bad to reverse that expectation."

In corporate news, Vodafone Group reported 4.2% growth in first-half group service revenue, driven by Europe and Africa, while Germany and Vodafone Business also saw positive growth.

However, group revenue declined by 4.3% due to foreign exchange rate fluctuations and prior-year business disposals, leading to a 44.2% plunge in operating profit. It reiterated its full-year guidance for “broadly flat” adjusted EBITDA of around €13.3bn and about €3.3bn in adjusted free cash flow, and declared an interim dividend per share of 4.5 euro cents.

Tobacco and vaping giant Imperial Brands announced that full-year revenues were flat as lower tobacco volumes were offset by strong growth in next-generation products (NGP).

Reported revenues for the 12 months to 30 September totalled £32.5bn, down 0.2% year-on-year. Tobacco and NGP net revenue grew +1.4% at constant currency when excluding Russian operations in the prior-year comparator after Imperial's exit from the region in April 2022. This comprised 0.7% growth in tobacco and 26.4% from NGP.