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London stocks experienced a decline in early trading on Tuesday, reflecting cautious sentiment among investors following the latest UK jobs data.
At 08:55 BST, the FTSE 100 index was down 0.4% at 8,236.36. The drop came as figures from the Office for National Statistics revealed a cooling in pay growth and a decrease in unemployment to a six-month low.
The unemployment rate fell to 4.1% from 4.2% in the previous quarter, aligning with economists' forecasts. Concurrently, growth in average earnings slowed to 5.1%, marking a two-year low, with annual growth including bonuses at 4%.
Additionally, data showed a decline of 42,000 in the number of vacancies between June and August, bringing the total to 857,000. This represented the 26th consecutive quarterly drop but still left the number of vacancies above pre-pandemic levels. The number of payrolled employees decreased by 6,000 from June to July but increased by 203,000 year-on-year.
Liz McKeown, Director of Economic Statistics at the ONS, commented, “Growth in total pay has slowed markedly again as one-off payments made to many public sector workers in June and July last year continue to affect the figures. Basic pay growth also continued to slow, though less sharply.”
Russ Mould, Investment Director at AJ Bell, noted, “The latest UK jobs data suggests a labour market that is cooling, but not as quickly as the Bank of England might prefer for more aggressive rate cuts. Wage growth has fallen to its lowest level since July 2022, but remains well above the Bank’s 2% inflation target. Despite the data being largely in line with expectations, a slight decrease in the unemployment rate and a notable increase in employment hint at ongoing tightness in the labour market. This presents a challenging scenario for the Bank of England as it prepares for its upcoming meeting.”
In equity markets, Centamin (LSE:CEY) saw a significant rise of more than 20% following news of an agreement to be acquired by AngloGold Ashanti in a £1.9 billion transaction. Centamin shareholders will receive new shares in AngloGold Ashanti and cash, with the deal offering a substantial premium over Monday's closing price.
Hochschild Mining and Fresnillo (LSE:FRES) also posted gains, while Wickes experienced a rally despite reporting a drop in interim profit and revenues. Wickes reaffirmed its profit expectations for the year and noted improving trends.
On the downside, AstraZeneca’s (LSE:AZN) shares fell after mixed results from a key lung cancer trial. Alpha Group’s stock tumbled following the announcement that CEO Morgan Tillbrook will step down at the end of the year, with Clive Kahn, the current chairman, set to take over as CEO from January 2025.
