London midday: Stocks edge up after UK jobs data, ahead of US CPI

London stocks had risen by midday on Tuesday but gains were unspectacular as investors mulled the latest UK jobs figures and awaited the release of key US inflation data.

The FTSE 100 was up 0.4% at 7,475.50.

Figures released earlier by the Office for National Statistics showed that the number of people unemployed ticked higher in October as real term wages fell. The jobless rate rose 0.1 percentage point in the three months to October, to 3.7%.

Growth for both average total pay - which includes bonuses - and regular pay, which excludes them, was 6.1% over the three months, the strongest increase outside of the pandemic period. However, once adjusted for inflation, total and regular pay both fell in real terms by 2.7% year-on-year. The ONS said the fall was among the largest since comparable records began in 2001.

Average regular pay growth for the private sector was 6.9%, and 2.7% for the public sector.

The ONS said that 417,000 working days were lost because of labour disputes in October, the highest since November 2011. Another wave of industrial action gets underway this week, with rail workers, nurses and postal staff all due to strike over pay and working conditions.

The ONS data also showed an uptick in the employment rate, however, which rose 0.2 percentage points to 75.6%. The number of employees increased during the period, while the number of self-employed fell.

The economic activity rate also fell, declining by 0.2 percentage points to 21.5%, which the ONS said was driven by people aged 50 to 64.

Russ Mould, investment director at AJ Bell, said: "A UK jobs market which had proved fairly resilient so far despite the gloomy economic backdrop shows increasing signs of weakening as the unemployment rate creeps up and the level of vacancies drops.

"There are signs that the exit from the workforce of large numbers of working age people in the wake of the pandemic is reversing as cost-of-living pressures act as a pull factor for people to return to employment.

"Wage growth nudged up but remained a long way short of the rate of inflation and this is probably not going to dissuade the Bank of England from slowing the pace of rate increases when it meets on Thursday."

Investors were also eyeing the release of the US consumer price index for November at 1330 GMT.

Mould said the data "will be keenly watched ahead of the latest decision from the Federal Reserve this week".

"Anything below the 7.3% pencilled in by analysts could give stocks a boost as it solidifies the case for the Fed to start easing up on rate hikes," he said. "Anything above this number could see investors take fright as they assume it means they will have to take more of the central bank’s painful medicine to curb rising prices.

"A 50-basis point increase is seemingly locked in, and this could influence Jerome Powell and his colleagues’ thinking in the early months of 2023."

In equity markets, Synthomer surged after saying it had sold its laminates, films and coated fabrics businesses to Surteco North America for $255m (£208m). The cash will be used to repay debt in order to strengthen the group's balance sheet and support a reduction in leverage, the company said.

On the downside, engine maker Rolls-Royce slumped as JPMorgan Cazenove maintained its ‘underweight’ rating on the shares and placed them on ‘negative catalyst watch’.

Market Movers

FTSE 100 (UKX) 7,475.50 0.40%
FTSE 250 (MCX) 18,959.94 0.75%
techMARK (TASX) 4,406.02 0.13%

FTSE 100 - Risers

Ocado Group (OCDO) 700.40p 4.63%
Smurfit Kappa Group (CDI) (SKG) 3,086.00p 2.97%
Prudential (PRU) 1,092.00p 2.92%
International Consolidated Airlines Group SA (CDI) (IAG) 135.88p 2.67%
Intermediate Capital Group (ICP) 1,198.00p 2.48%
Schroders (SDR) 458.10p 2.09%
Land Securities Group (LAND) 627.80p 2.05%
St James's Place (STJ) 1,155.00p 2.03%
Endeavour Mining (EDV) 1,705.00p 1.97%
Flutter Entertainment (CDI) (FLTR) 12,205.00p 1.84%

FTSE 100 - Fallers

Rolls-Royce Holdings (RR.) 90.25p -2.79%
BAE Systems (BA.) 816.00p -1.81%
London Stock Exchange Group (LSEG) 7,532.00p -1.23%
Rentokil Initial (RTO) 527.80p -1.05%
Pearson (PSON) 917.40p -1.04%
Relx plc (REL) 2,312.00p -0.77%
AstraZeneca (AZN) 11,266.00p -0.74%
Centrica (CNA) 91.58p -0.69%
British American Tobacco (BATS) 3,288.50p -0.57%
Unilever (ULVR) 4,102.00p -0.49%

FTSE 250 - Risers

Synthomer (SYNT) 128.40p 9.37%
Molten Ventures (GROW) 384.00p 4.12%
888 Holdings (DI) (888) 94.55p 3.84%
BBGI Global Infrastructure S.A. NPV (DI) (BBGI) 159.40p 3.78%
TUI AG Reg Shs (DI) (TUI) 148.90p 3.58%
HGCapital Trust (HGT) 351.50p 3.38%
Jupiter Fund Management (JUP) 133.20p 3.26%
Mitchells & Butlers (MAB) 132.20p 3.20%
Johnson Matthey (JMAT) 2,113.00p 3.17%
OSB Group (OSB) 481.20p 2.95%

FTSE 250 - Fallers

Volution Group (FAN) 367.00p -4.18%
Ferrexpo (FXPO) 152.20p -3.12%
easyJet (EZJ) 368.90p -2.87%
Moonpig Group (MOON) 121.80p -1.77%
Darktrace (DARK) 305.40p -1.39%
Edinburgh Worldwide Inv Trust (EWI) 176.20p -1.34%
AJ Bell (AJB) 355.00p -1.22%
4Imprint Group (FOUR) 4,205.00p -1.18%
Hilton Food Group (HFG) 523.00p -1.13%
Drax Group (DRX) 612.50p -1.13%