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FTSE 100 Live 11 June: Surprise unemployment rise but wage growth remains high, shares seen higher

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FTSE 100 Live (Evening Standard)

Airports boom after busy half-term

07:25 , Simon English

THE economy might be steady at best, but airports are booming as people look to get out of the UK, at least on holiday.

Heathrow today said it served a record breaking 81.5m passengers in the 12 months to May.

Meanwhile a bumper half-term holiday week at London Stansted helped boost May’s passenger numbers to a record-breaking 2.7million, the busiest ever May at the airport.

The monthly total was up 6.4% on the same month in 2023, and surpassed the previous busiest ever May in 2019 by 143,000 passengers.

Heathrow said: “Terminal 2 – The Queen’s Terminal celebrates 10 years of operations this summer. Since opening in 2014 it has seen 148m passengers traveling to more than 30 different countries on over a million flights.”

Heathrow CEO Thomas Woldbye said: “Supporting 81m journeys doesn’t just help families to make wonderful holiday memories, importantly it is about the vital trade and business links a hub like Heathrow creates for the UK’s economy.”

James Richardson, London Stansted’s Finance Director, said:

“London Stansted’s fantastic range of destinations, and reliable and efficient airport operation continues to drive strong demand as we welcomed 2.7 million passengers to the airport in May.

“The record-breaking numbers were boosted by a very busy half-term week as hundreds of thousands of Brits headed off on holiday as well as huge numbers of overseas visitors choosing the airport as their gateway to London and the East of England.”

07:24 , Daniel O’Boyle

Yael Selfin, chief economist at KPMG UK, says the latest jobs figures are “unlikely to shift the dial at the Bank of England”.

Selfin said: ““Wage growth remained elevated in April as the 10% hike in the National Living Wage was enough to temporarily arrest the downward momentum in pay.

“The unemployment rate ticked up to 4.4%. The recent weakening in demand for staff has been attributed to a lack of roles and firms delaying hiring decisions. This is consistent with a broader trend of retaining existing labour, and could signal that firms expect a pickup in activity so that they could utilise their existing staff more.”

“We expect the MPC to stay put at its June meeting and reassess the incoming data flow over the summer before it embarks on cutting interest rates.”

FTSE 100 seen higher after steady US session, Apple shares fall 2%

07:20 , Graeme Evans

The FTSE 100 index is set for a steady session after Wall Street took a relaxed stance ahead of tomorrow’s inflation reading and Federal Reserve decision.

The S&P 500 index and the Magnificent Seven group of heavyweight stocks both rose by 0.3%, although Apple fell 2% after it unveiled new AI features for the iPhone.

FTSE 100 futures point to a rise of 20 points to 8248, putting back the losses seen yesterday after European markets were rattled by France’s snap election.

The Paris-based CAC40 fell 1.4% yesterday, with the shares of banks including BNP Paribas hit hard by the political uncertainty. The benchmark is seen opening slightly higher today.

Brent Crude stood at $81.52 a barrel this morning, having surged by more than 2% in yesterday’s session.

Will the Bank of England forge its own path?

07:17 , Daniel O’Boyle

George Sweeney (DipFA), financial advisor at personal finance site Finder.com, says: “The latest figures from the ONS show wage growth excluding bonuses remains level at 6%. This was what some economists were expecting. Although it’s positive for people’s wages and could help us continue to crawl away from the recent recession, this continuing growth doesn’t bode well for the possibility of incoming rate cuts from the Bank of England (BoE).”

“We’ve seen inflation fall back to manageable levels, but the BoE will be looking at all the data available before making a decision on whether to lower the base rate. The key question is going to be how much stock the Monetary Policy Committee put into wage growth data compared to inflation and figures like the unemployment rate.

“The European Central Bank (ECB) cut rates to 3.75% at the end of last week, but the next US inflation reading and Fed Funds rate decision could be more influential for the UK. The jury’s out on whether we’ll follow moves from the EU, the US, or forge our own path forward.”

Wage growth remains high

07:07 , Daniel O’Boyle

Wage growth in the UK including bonuses was higher than expected at 5.9% for the three months to April, while growth excluding bonuses was unchanged at 6.0%.

Both figures are at levels the Bank of England has indicated are too high to be consistent with its 2% inflation target.

The persistently high figures may encourage the Bank of England to wait until the Autumn to cut interest rates

UK unemployment up to 4.4%

07:04 , Daniel O’Boyle

Unemployment in the UK rose to 4.4% in the three months to April, in the latest sign that high interest rates are loosening the labour market.

It’s the highest unemployment rate since July 2021.

Unemployment had been expected to hold steady at 4.4%.

Recap: Yesterday’s top stories

06:49 , Simon Hunt

Good morning from the Standard City desk.

European financial markets fell back on Monday as political uncertainty weighed on investor sentiment.

French stocks were particularly weak due to President Emmanuel Macron’s shock decision to call a snap election.

Banks were particularly heavy losers amid a lack of clarity over the future government in the country, denting firms in the sector across the UK and Germany as well.

The Cac 40 in France ended 1.35% lower and the German Dax index was down 0.37% at the close.

The FTSE 100 finished 16.89 points, or 0.20%, lower to end the day at 8,228.48.

Across the Atlantic, the Dow Jones inched lower as traders were cautious ahead of key inflation data and a Federal Reserve interest rate decision later this week.

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Here’s a summary of our top stories from yesterday:

  • Leading business group urges new government to unleash London as an “engine of growth” with a package of “quick win” measures including more devolution, relaxing planning rules and ending the tourist tax

  • Digital ad firm Brave Bison pulls out of £30 million takeover of rival Mission after rejection of its bid

  • Photo booth group ME Group brings a record number of self-service laundry machines to supermarket car parks and petrol station forecourts

  • Nationwide members urged to vote “no” to Virgin Money takeover at building society AGM next week by rebel group

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