The Office for National Statistics published employment and wages figures this morning, showing the UK unemployment rate falling to 3.8%.
Meanwhile, salaries rose faster than expected, with average compensation increasing by 6.5%. It is closer to catching up with inflation than in previous months, but still falls short of the pace of price growth.
Meanwhile, the shares are set to open a day higher with Ashted, Bellevue and CMC Markets joining those publishing updates. Gilts will also be in focus after a jump in yields tomorrow afternoon.
Nikkei and S&P 500 continue to rally, FTSE 100 struggles to keep up
07:24 , Graeme Evans
Brent crude futures are trading near $72 a barrel this morning after a 4% drop yesterday on a weak global demand outlook.
The pressure meant the commodity-focused FTSE 100 index underperformed European markets, adding just 0.1% compared to 0.9% for the Frankfurt-based DAX.
Wall Street had another strong session yesterday as the S&P 500 index moved further into bull market territory, up 0.9% from a one-year high, with the tech-focused Nasdaq Composite up another 1.5%.
Attention now turns to this afternoon’s US inflation reading for May, which economists expect will see the headline rate drop to 4.1%, but core prices still at a stubborn 5.3%.
The outcome will have a bearing on whether the Federal Reserve chooses to hold off on raising interest rates for the first time since early 2022, when the central bank announces its latest decision tomorrow evening.
This morning, policy makers in China took steps to boost the country’s recovery by slashing the seven-day reverse repurchase rate by 10 basis points to 1.9% in the first cut since last August.
The move drew mixed reactions in Asian markets as the Shanghai Composite traded in negative territory but Tokyo’s Nikkei extended its recent gains to set another post-1990 high.
According to CMC Markets, the FTSE 100 index is expected to open 27 points higher at 7597 today.
The jobs market remains resilient with unemployment at 3.8%
07:09 , Daniel O’Boyle
The unemployment rate fell to 3.8%, while wages rose, as the labor market showed no signs of slowing, despite rising interest rates.
Unemployment was expected to rise to 4.0%, but instead 250,000 more people were at work, meaning the number employed exceeded pre-pandemic levels.
ONS Director of Economic Statistics Darren Morgan said: “With a further rise in employment, the number of people working overall has surpassed its pre-pandemic level for the first time, setting a new record high, as Total hours worked.
“The biggest driver in recent jobs growth, meanwhile, is health and social care, followed by hospitality.
“While there has been a further decline in the number of people neither working nor looking for work, which is now falling into the right age range, people who are out of the jobs market due to long-term illness, a new rising to records.
Pay, meanwhile, closed in on inflation with pay including bonus up 6.5% and pay without bonus up 7.2%, both ahead of expectation. While both were still below inflation, they were much closer than in previous months.
“In cash terms, basic pay is now rising at the fastest rate since current records began, except when the figures were distorted by the pandemic,” Morgan said. “However, even then, wage growth continues to lag behind inflation.”