London pre-open: Stocks to nudge up as investors mull UK jobs data

London stocks were set to edge up at the open on Tuesday following a solid session on Wall Street, as investors mulled the latest UK jobs data.

The FTSE 100 was called to open around 10 points higher.

Figures released earlier by the Office for National Statistics showed that wage growth remained at its highest level in 22 years in July, but the unemployment rate ticked up.

Average regular earnings growth was unchanged at 7.8% in the three months to July, but the unemployment rate nudged up to 4.3% from 4.2%. Growth in average total pay, which includes bonuses, was 8.5% in July, up from 8.2%.

The number of job vacancies in the three months to August was 989,000, down 64,000 from the previous quarter, the ONS said.

Director of economic statistics Darren Morgan said: "Working days lost to strikes jumped in July, especially in education, with the health sector also still heavily affected.

"However, the overall number is still below what it was a few months ago.

"Job vacancies have fallen below the million mark for the first time since the summer of 2021, when the reopening of the economy created huge demand for workers.

“However, they still remain significantly above pre-Covid levels."

Pantheon Macroeconomics said: "The persistence of excessively vigorous wage growth in July probably means the MPC can’t stop raising Bank Rate at this month’s meeting, but the end of the tightening cycle is not far off now."

In corporate news, Associated British Foods lifted annual guidance again, boosted by recovery at its Primark retail chain and strong performance from food operations.

AB Foods said it now expected full-year adjusted operating profit to be "slightly better" than previous guidance, when it said earnings would be "moderately ahead" of 2021/22's £1.43bn.

Primark like-for-like sales growth for the financial year is now tipped to be around 9%, with like-for-like sales likely to be around 7% in the second half. For the financial year as a whole, sales are forecast to be around 15% ahead year on year, it added.

“These higher sales are the result of limited and carefully selected price increases through this financial year to partially recover high levels of input cost inflation, assisted by a strong performance from new stores opened in the year, and by demand for our attractive ranges,” the company said.

However it said adjusted operating profit margin would be weaker in the second half due to higher-than-expected stock loss from stores across its estate and a modest amount of German restructuring costs, coming in at slightly below 8% and the same figure for the full financial year.

Industrial valve manufacturer Rotork announced that long-standing finance chief Jonathan Davies is to retire early next year.

The company, which makes flow control solutions for the oil and gas, water, energy and industrial sectors, said in a statement that Davis, who has been finance director since 2010, will be replaced by Ben Peacock, currently vice president of finance and IT at Weir Group's minerals division.