London stocks rose in early trade on Tuesday while sterling slumped as data showed the UK jobless rate hit its highest level in September since the pandemic and wage growth eased, raising hopes of a rate cut next month.
At 0825 GMT, the FTSE 100 was up 1% at 9,883.86, while the pound was down 0.3% against the dollar at 1.3132.
Figures released earlier by the Office for National Statistics revealed further signs of weakening in the labour market after the unemployment rate ticked higher.
Employment softened by 0.2 percentage points in the three months to September, while the unemployment rate rose 0.3pp to 5.0%, marginally ahead of forecasts for 4.9% The unemployment rate now stands at a post-pandemic high.
Average earnings, meanwhile, rose by 4.6%, or by 4.8% once bonuses were included.
Driving the growth was the public sector, where earnings rose by 6,6%. In the private sector, earnings increased by 4.2%.
Liz McKeown, director of economic statistics at the ONS, said: “Taken together, these figures point to a weakening labour market.
“The number of people on payroll is now falling, with revised tax data now showing falls in most of the 12 months.
“Meanwhile, the unemployment rate is up to a post-pandemic high. The number of job vacancies, however, remains broadly unchanged.”
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: “The FTSE 100 has opened with a spring in its step, as cooling wage growth fuels hopes the Bank of England will cut rates in December.
“Private sector pay, a key metric for the committee, slowed to 4.2% in September, while broader wages undershot forecasts. Labour market signals are softening across the board, with payrolls falling again in October and unemployment nudging higher.
“Markets are now pricing in a 73% chance of a December rate cut, as the case for policy easing gains traction.”
In equity markets, Vodafone shot to the top of the FTSE 100 as it said it expects annual profit and cash flow to be at the upper end of expectations after reporting a jump in adjusted earnings and also unveiled a new progressive dividend policy with a 2.5% increase for the full year.
Irish energy sales, marketing and distribution group DCC was higher as it confirmed full-year guidance for “good operating profit growth” after a swing to profitability in the second quarter.
Oxford Instruments surged after saying it was recovering following significant macroeconomic disruption in the first quarter, with order momentum improving in Q2. It also said it expects to deliver an improved performance in the rest of the year.
Publishing and events specialist Informa rose as it reiterated its full-year outlook on the back of ongoing strong trading.
4imprint rose sharply after saying it expects full-year revenue at the high end of the current analyst forecast range and pre-tax profit above the range.
On the downside, Hilton Food tanked as it downgraded its full-year profit guidance and struck a downbeat tone on the outlook for trading in 2026. The company now expects adjusted pre-tax profit for the financial year ending 28 December of between £72m and £75m. This is below company-compiled consensus of £76.8m to £81m in September.
It pointed to ongoing operational disruption at its Foppen smoked salmon business in Europe and issues at its Greek facility.
Ashmore was knocked lower by a downgrade to ‘sell’ from ‘hold’ at Deutsche Bank.
Market Movers
FTSE 100 (UKX) 9,883.86 0.99%
FTSE 250 (MCX) 22,087.82 0.54%
techMARK (TASX) 5,579.26 1.31%
FTSE 100 – Risers
Vodafone Group (VOD) 92.86p 4.43%
SSE (SSE) 1,985.50p 2.19%
WPP (WPP) 292.70p 2.02%
Barratt Redrow (BTRW) 396.30p 1.98%
British American Tobacco (BATS) 4,244.00p 1.92%
DCC (CDI) (DCC) 4,862.00p 1.84%
London Stock Exchange Group (LSEG) 9,234.00p 1.79%
AstraZeneca (AZN) 13,358.00p 1.77%
Persimmon (PSN) 1,253.00p 1.75%
Compass Group (CPG) 2,521.00p 1.69%
FTSE 100 – Fallers
Croda International (CRDA) 2,705.00p -2.73%
Auto Trader Group (AUTO) 743.40p -1.01%
Flutter Entertainment (DI) (FLTR) 17,450.00p -0.82%
BAE Systems (BA.) 1,811.00p -0.60%
Beazley (BEZ) 894.50p -0.50%
Babcock International Group (BAB) 1,191.00p -0.25%
Mondi (MNDI) 823.00p -0.12%
Smith & Nephew (SN.) 1,269.50p -0.12%
Melrose Industries (MRO) 610.20p -0.07%
RELX FINANCE BV 3.375% GTD NTS 20/03/33 (BW73) 98.64p 0.00%
FTSE 250 – Risers
Oxford Instruments (OXIG) 1,994.00p 11.27%
NCC Group (NCC) 152.00p 4.54%
Watches of Switzerland Group (WOSG) 442.00p 4.10%
Telecom Plus (TEP) 1,768.00p 2.20%
Pagegroup (PAGE) 240.60p 2.12%
Currys (CURY) 132.90p 1.92%
Taylor Wimpey (TW.) 106.80p 1.91%
HarbourVest Global Private Equity Limited A Shs (HVPE) 3,000.00p 1.69%
Ceres Power Holdings (CWR) 418.40p 1.65%
Vistry Group (VTY) 655.00p 1.58%
FTSE 250 – Fallers
Ashmore Group (ASHM) 162.70p -4.85%
Rank Group (RNK) 108.40p -4.07%
Chemring Group (CHG) 527.00p -1.50%
Foresight Environmental Infrastructure Limited (FGEN) 67.00p -1.03%
QinetiQ Group (QQ.) 447.20p -0.93%
Pinewood Technologies Group (PINE) 352.00p -0.85%
Avon Technologies (AVON) 1,856.00p -0.64%
Lancashire Holdings Limited (LRE) 672.00p -0.59%
Volution Group (FAN) 624.00p -0.32%
Greencoat UK Wind (UKW) 100.00p -0.30%