- FTSE 100 climbs 97 points to 9,884.5
- UK unemployment rate rises to 5%
- Vodafone pledges return to dividend growth
9.18am: FTSE on track to hit 10,000 before Xmas
The FTSE is maintaining its course so far, happy to ride the crest of this new wave as the sight of the five-digit milestone looms in the ever-nearer distance.
Victoria Scholar, head of investment at Interactive Investor, says: “After hitting a record closing high on Monday, fuelled by mining stocks, the FTSE 100 continues to push higher, gaining another 1% outperforming mainland Europe.”
As well as Vodafone rising on its return to form, and housebuilders being lifted by the latest UK unemployment data fueling hopes of a December rate cut, there are also gains for media groups WPP, Pearson and Informa, tobacco producer BAT, power company SSE.
Precious metals miner Fresnillo is there too, as gold rallies close to three-week highs amid growing expectations that the Fed will cut interest rates next month, says Scholar.
Market analyst Neil Wilson at Saxo says the FTSE is “almost touching 9,900 as global equity markets enjoy a relief rally on hopes the protracted US government shutdown would end soon, whilst a bounce in AI stocks lifted sentiment across the board”.
He thinks the FTSE 100 could hit 10,000 by Christmas.
8.29am: December and more rate cuts expected
Some reaction to the ONS jobs data.
Matt Swannell, chief economic advisor to the EY ITEM Club, notes that private sector regular pay growth continues to slow, with “evidence of downward momentum that should drive pay growth lower by year-end” and that labour market conditions are gradually loosening.
While the Labour Force Survey (LFS) data continues to carry relatively little weight due to ongoing problems with low response rates, and HMRC’s count of payrolled employees also has issues, “falls in both September and October indicate renewed weakness, after headcount had stabilised in the summer, and although previously strong job creation in the public sector had offset job losses in the private sector, that support now appears to be fading”.
Before we get December’s MPC meeting, we have the Budget and two ONS inflation releases, which Swannel says are “likely to be highly influential factors”.
“But evidence of a further cooling in pay pressures removes one potential roadblock to a pre-Christmas rate cut as well as increasing the chances of further rate cuts in 2026.”
Sanjay Raja, Deutsche Bank’s chief UK economist, says: “Today’s data should give the MPC more confidence to cut Bank Rate further by year-end.”
He adds that Budget uncertainty “may be hampering hiring plans heading into Q4”, the ONS jobs numbers “should continue to strengthen the case for a Christmas rate cut” as it points to two important things: more slack building in the labour market, and pay momentum continuing to slow.
“Both should be encouraging for the MPC. Indeed, Governor Bailey talked up the need for a larger accumulation of evidence for the MPC to cut Bank Rate later this year. And today’s data should give the majority of the MPC some added confidence that weakness in the labour market is translating into weaker pay momentum, which should ultimately feed through into inflation in the months and quarters to come.”
Rob Wood, chief UK economist at Pantheon Macroeconomics, says the MPC “will react to weaker-than-expected job growth with a rate cut in December, and will be eyeing a follow-up reduction in early 2026”.
He says the MPC, which voted 5-4 to hold last week, are “on a hair trigger”.
Today’s data reduces his confidence that the labour market is stabilising after April’s payrolls tax hike hit hiring. “There are enough signs of stabilisation still, and enough doubts in the data, for us to stick to our view, but we are wobbling a little and are therefore close to forecasting another rate cut in March.”
8.15am: FTSE comes out swinging
The FTSE 100 has come out swinging, barging 104 points higher to 9,891 in the first few minutes of trading, another new all-time high.
Vodafone Group PLC is top of the early risers, up 5.6% after its bullish set of interim results.
Housebuilders are also on the rise, being sensitive to the possibility of another interest rate cut and falling mortgage rates. Barratt Redrow, Persimmon, and Berkeley Group are all up around 2%.
7.50am: Vodafone nudges towards top end of guidance
Vodafone Group PLC (LSE:VOD) is promising a return to a progressive dividend policy and looking towards the upper end of its full-year earnings and cash flow guidance after posting interim results that were marginally better than expected.
The telecoms group reported underlying earnings excluding lease expenses (EBITDAaL) of €5.73 billion for the half-year to 30 September, up 5.9% versus a year ago and slightly ahead of the average analyst forecast of €5.65 billion.
Chief executive Margherita Della Valle said: “Following the progress of our transformation, Vodafone has built broad-based momentum. In the second quarter we saw service revenue accelerating, with good performances in the UK, Türkiye and Africa, and a return to top-line growth in Germany.
She said that because the group’s “anticipated multi-year growth trajectory is now underway” the board is introducing a new progressive dividend policy, with an expected increase of 2.5% for this financial year.
7.24am: Retail sales down as shoppers wait for Black Friday deals
Retail sales rose by 1.6% year-over-year in October, down from 2.3% in September, according to data from the industry body, the British Retail Consortium.
Like-for-like sales rose 1.5%, down from 2.0% in September.
Food sales increased by 3.5% in October, down from 4.3% in September but flat against the 12-month average growth of 3.5%.
Non-Food sales increased by 0.1%, down from 0.7% in September and below the 12-month average growth of 1.0%.
“October was a subdued month, with the weakest growth since May,” says BRC CEO Helen Dickinson. “Many delayed spending, waiting for Black Friday deals and cooler temperatures before buying toys, electronics and clothing.”
She says furniture and other homeware fared better.
“Food sales also saw good growth, but this was mostly driven by higher prices rather than higher volumes.”
She says retailers are “counting on Black Friday to deliver a vital boost, but looming Budget decisions risk undermining fragile consumer confidence”.
Online growth almost dried up altogether, while sales of many household goods continued to see consistent growth, linked to the lag benefit from the house buying surge seen before Stamp Duty changes in Spring.
7.17am: FTSE to make barnstorming start, UK unemployment rises again
A barnstorming FTSE 100 open is expected on Tuesday, as the pound fell on weaker jobs market data and following a strong showing on Wall Street overnight.
The London benchmark has been called 85 points higher on the futures market, which would propel the index well into new record territory, after it finished up 104.58 points at a new all-time closing high of 9,787.15.
US tech stocks on the Nasdaq led the charge overnight, surging 2.3%, while the S&P 500 rose 1.5% and the Dow Jones finished up 0.8%.
In Asia, the Hang Seng is down 0.2% in Hong Kong and the Nikkei is down 0.1% in Tokyo.
Fresh UK data this morning showed the unemployment rate surprisingly rose to 5.0% in the three months to October from 4.9%, while average pay including bonuses eased to 4.8% from 5.0%, with economists having expected no change.
Average wages excluding bonuses softened to 4.6% from 4.7% as expected.
