9.20am: Surprise rate cut hopes diminish after job stats, say commentators
More on the unemployment numbers this morning and more critically the jump in wages for the first time in a year ahead of the Bank of England rate decision on Thursday.
Capital Economics said the rise in regular private sector pay growth in October will add to the Bank of England’s worries about a resurgence in inflation.
Adding it had expected public sector pay deals to drive up wage growth in October, it was private sector pay deals that were mostly the reason average earnings rose to 5.2%.
“That said, the Bank can take some comfort from the further gradual loosening in the labour market.
"The reliability issues of the Labour Force Survey mean that the Bank won’t read too much into the unemployment rate staying at 4.3%.
“But it will put more weight on the 35,000 decline in the PAYE measure of employment in November and the further fall in the number of job vacancies, from 828,000 in October to 818,000 in November, which is now broadly back in line with its pre-pandemic level.”
Danni Hewson, AJ Bell’s head of financial analysis, added: “There is still a giant question mark hanging over official jobs figures as the ONS battles to increase the number of people responding to its Labour Force Survey.
“But even with that caveat it’s impossible to ignore the cracks that have been widening in the labour market, with vacancy numbers dropping off month after month.
“Today’s official figures do have a few bright spots, including a slight fall in the economic inactivity rate. Wage growth also rose for the first time in over a year up to 5.2% and busting inflation by 3%.
“For workers, getting a bit more in their pockets will be welcome, but it has pushed the door even further closed on the slim chance that the Bank of England might deliver a surprise cut to interest rates later this week.”
Consensus is still for rates to remain at 4.75%.
FTSE 100 down 46 at 8,215.
8.55am: Good news in short supply as Footsie drops 60
Good news is at a premium this morning with Footsie’s fall reflecting a string of downbeat updates and warnings.
Capita and Hollywood Bowl have joined Bunzl (LON:BNZL) in the doghouse with cautious trading updates.
Outsource specialist Capita reported an 8% decline in adjusted revenue for the eleven months ending November 30, driven by exiting lower-margin service lines and lingering headwinds from the prior year. Shares fell 9% to 15.8p response (read more).
Bowling alley operator Hollywood meanwhile posted record revenues but warned that the rise in national insurance announced by Chancellor Rachel Reeves would see costs per average employee rise to £1,115 from £400.
The FTSE 250 group is working to mitigate the impact said chief executive Stephen Burns. Shares dropped 7% to 310p (read more)
FTSE 100 down 62 at 8,199.
8.20am: Footsie tumbles 50 points as Bunzl takes a beating
FTSE 100 has opened sharply lower with Bunzl leading the fallers on a cautious trading update.
The plastics distributor shed more than 5% at the open on a warning that profits are being hit by stickier than expected price deflation.
Revenues on an actual basis will also be lower this year, said the FTSE 100 group.
Hopes that interest rates will fall rapidly also took a dent as wages in the UK rose for the first time in a year.
Unemployment stayed steady at 4.3%, but wages including bonuses were up by 5.2%.
Oil groups were also a drag on the index with BP (LON:BP) and Shell (LON:SHEL) down by 1.4% and 1.8% respectively as the price of Brent flirted with the US$73 a barrel mark.
LSE is the best of the risers so notching up a 1% gain.
FTSE 100 down 50 at 8,211.
8.05am: Bunzl prices lower than expected but volumes 'robust'
Bunzl said expects underlying revenues this year to be 3% higher than a year ago, though will be flat or down slightly on an actual basis.
Acquisitions will be the driver, added the plastics distributables group with organic revenues seeing volumes pick up but prices are still being affected by deflation being stickier than expected.
“This is expected to have a slight impact on group adjusted operating profit in 2024, driven by Continental Europe,” said the statement.
Group adjusted operating profit in 2024 will rise strongly over 2023, said the statement with margins higher than the previous year.
In 2025, Bunzl said expects "robust" revenue growth in 2025, helped by recent acquisitions ( read more....).
7.35am: Wages rise, unemployment steady
Wages have risen for the first time in more than a year casting more doubt on potential interest rate cuts in the UK.
Unemployment was unchanged at 4.3% in the three months to October, said the Office for National Statistics, but pay including bonuses rose to 5.2%.
Job vacancies fell again and the number of employees on the payroll fell by 22,000 (0.1%), though employment is still up 160,000.
The ONS has admitted there have been issues with the reliability of its numbers, but said its estimate for November is for a 35,000 fall in payrolled employees.
7.15am : Poor start expected in London
FTSE 100 was tipped to open lower again after yesterday’s 38 point fall.
Financial spread betters were pencilling in a similar fall when markets open today with hopes for a significant Santa Clause rally looking a little forlorn.
Plastics distributables giant Bunzl is among the early reporters and confirmed a £200 million buyback for 2025 when it also expects robust revenue growth, said the trading update.
Elsewhere, Bitcoin’s rise continues, with the price topping US$107,000 as Donald Trump reiterated plans to create a US strategic reserve for crypto similar to its oil holdings.
Bitcoin specialist MicroStrategy being added to the Nasdaq 100 index also helped sentiment for the cryptocurrency said commentators.
5.00am: Unemployment, Bunzl and Hollywood Bowl on agenda
UK unemployment figures are due on Tuesday, while Hollywood Bowl and Bunzl will be among those to update.
Can Hollywood Bowl remain an unlikely bright spot... Read more
Further buybacks are expected by analysts from Bunzl... Read more
Announcements due:
Finals: Hollywood Bowl Group PLC (LON:BOWL)
Trading updates: Dunedin Enterprise Investment Trust, Bunzl PLC, Capita PLC (LON:CPI)
Finals: Chemring (LON:CHG) Group PLC
AGMs: Gfinity, GS Chain, Netcall
Economic news: Unemployment (UK), Retail Sales (US), Industrial Production (US)