The FTSE 100 rose yesterday but all investors’ eyes remain on the US, with Donald Trump extending a trade deal deadline once more with China, while also seeming to allow chipmakers to export to the Asian nation - soon after having blocked shipments heading there.
Domestically, the UK job market is showing four-year highs for unemployment levels, lower new vacancies being posted - but still fairly strong wage growth, leaving some businesses struggling to cover additional costs they have been hit with this year.
“Continued wage growth is creating real challenges for business and the wider economy. It’s an important factor behind persistent services inflation, as the Bank of England Governor told our conference in June,” said a British Chambers of Commerce statement on it.
Follow The Independent’s live coverage of the latest stock market and business news here:
Key points
- UK unemployment remains at four-year high - fewer vacancies in key areas
- FTSE 100 rise this mornign , US stocks fell, Asian markets rose
- Expert explains why it's so much more difficult to find a new job
- Government lines up insolvency firm in case of Thames Water collapse
Business and Money news latest
08:02 , Karl MatchettGood morning - jobs market news, companies updates, stock market latest and more all coming for you today.
As ever, our business and money blog will tell you what’s going on and what it means for you.
Jobs vacancies fall as unemployment sticks at 4.7%
08:09 , Karl MatchettThe Office for National Statistics (ONS) said the rate of UK unemployment struck 4.7% in the three months to June.
It was the same as the previous three-month period, which had been highest level since June 2021.
Meanwhile, average earnings growth, excluding bonuses, remained at 5% for the period to June.
It came as UK job vacancies tumbled by 44,000 over the three months to July to 718,000 – the lowest number of job openings since April 2021.
Retail growth is ‘barely touches the sides’ due to increased costs
08:15 , Karl MatchettGrowth in the retail sector is “barely touching the sides” when it comes to costs, bosses have warned
July retail sales were up 2.5 per cent on a year ago but they were not close to covering the the last budget’s £7 billion in new costs on the sector.
The uptick in the UK’s total retail sales was against growth of 0.5 per cent last July and the 12-month average growth of 1.9 per cent, according to British Retail Consortium (BRC)-KPMG data.
Food sales increased by 3.9 per cent on last July due to warm weather and a packed sporting schedule, although rising food inflation – now at 4 per cent, according to latest BRC figures – meant increased spending was more a result of higher prices than improved demand.
More from PA:
Why mounting costs mean recent retail growth ‘barely touches the sides’
FTSE 100 rises as jobs market weakens
08:33 , Karl MatchettThe FTSE 100 has risen this morning, up 0.3 per cent in early trading.
Spirax Group is the biggest riser with a 16% surge after reporting this morning.
Germany’s DAX is almost flat but France’s CAC 40 is up 0.5% so far, after rises in Asia overnight.
The Nikkei 225 rose 2.15%, with smaller gains for the Hang Seng, Asia Dow and Australian ASX200.
UK unemployment remains at four-year high with ‘fewer job opportunities’ in retail and hospitality
08:49 , Karl MatchettUnemployment rates remained the same and job vacancies fell - but annual growth in earnings grew over the past three months to continue to paint a difficult picture for UK businesses.
The Office for National Statistics (ONS) said the rate of UK unemployment struck 4.7 per cent in the three months to June. It was the same as the previous three-month period, which had been highest level since June 2021.
Meanwhile, average earnings growth, excluding bonuses, remained at 5 per cent for the period.
It came as UK job vacancies tumbled by 44,000 over the three months to July to 718,000 – the lowest number of job openings since April 2021.
While fewer job opportunities would of course become problematic over the longer term, this year the Bank of England - and thus the wider economy - has been more troubled by the rate of wage growth, which contributes to stoking high inflation levels. That has appeared to be dropping off recently, with employers cutting back on new hires due to other expenses including hiked National Insurance and minimum wage payments.
Recruitment is in a doom loop – there’s only one thing for it, chancellor…
09:13 , Karl MatchettAs a KPMG study lays bare years of falling job openings, and with the unemployment figure refusing to shrink, Britain’s bosses are stuck in hiring limbo that only Rachel Reeves can get them out of, says James Moore...
Recruitment is in a doom loop – there’s only one thing for it, chancellor…
Growing labour market turmoil unlikely to trigger September rate cut
09:30 , Karl MatchettJobs figures released today make it unlikely we’ll see an interest rate cut by the Bank of England next month, the Institute of Chartered Accountants in England and Wales say.
We’ll preface this by laying out: very few analysts have been expecting one straight after the August cut.
That was even less likely following the two-vote close call we got last week.
A quarterly rate cut has been the theme all year, making November always the more likely date to look at for the next one.
Still, the ICAEW are a noted organisation and the explanation behind jobs cuts is well worth a note.
Suren Thiru, ICAEW Economics Director, said:
“These figures signal growing turmoil in the UK labour market, with April’s leap in employment costs and a flagging economy pushing more businesses to actively cut headcount and cap pay awards.
“Wage growth is likely to weaken over the course of the year as softening economic conditions, rising redundancies and elevated staffing costs increasingly hinder pay settlements.
“The UK jobs market is facing more pain in the coming months with higher labour costs likely to lift unemployment moderately higher, particularly given growing concerns over more tax rises in this Autumn’s Budget.
“While these disheartening figures will reassure rate-setters that last week’s policy loosening was the right call, the pace at which the labour market is currently cooling is unlikely to be sufficient to prompt another rate cut in September.”
What jobs market data means for pensions
09:45 , Karl MatchettAs a reminder, the triple lock on state pensions means it rises each year by whichever is highest out of: inflation, wage growth or 2.5%.
That means today’s wage data is important and will factor in to potential calculations for the state pension’s change in payments.
“This isn’t the crunch month for the triple lock, but we’re not far off now,” explained Sarah Coles, head of personal finance at Hargreaves Lansdown.
“Total pay is up 4.6% in the year to April-June, and it’s the May-July figure that counts for the triple lock. Pay growth has eased in recent months, and if this trend continues, we can expect wage inflation to be between 4% and 4.5% when it counts.
“Given that the Bank of England forecasts inflation at 4%, we might expect the state pension to rise by between 4% and 4.5% - to between £12,451 and £12,512.
“This would bring it within touching distance of the personal allowance – so anyone with even a very modest personal pension income could end up paying income tax.”
Looking for a new job? Prepare to find it tougher, says expert
10:05 , Karl MatchettAs noted earlier, it’s not just that unemployment remains at elevated levels - the number of vacancies they can turn to is also diminishing.
Danni Hewson, AJ Bell head of financial analysis, explains the dilemma businesses are facing right now.
“In a nutshell, if you are looking for a job today, you’re going to find it much tougher than you would have just a year ago,” she said.
“Firms have had to shoulder big tax and wage increases; they’re worried that further tax hikes could be coming down the track and they’re being cautious.
“That caution is manifesting itself in recruitment decisions. They’re putting off taking on new staff and they’re not replacing many of those who leave.
“There will be plenty of speculation about the role AI might be playing in those decisions, but money will be at the forefront of employers’ minds and the cost of labour has weighed on firms’ ability to grow.
“It’s a slow erosion rather than a seismic shock, but the cooling trend will undermine any expectation that the supercharged growth that the government promised just a year ago might be rediscovered at the back end of the year.
“It’s not surprising that the decline has been concentrated in the narrow-margined retail and hospitality sectors.
“There are some areas of growth, in particular the numbers employed in health and social work has increased but that has been offset by declines elsewhere.”
US-China deal extension offers certainty for businesses
10:22 , Karl MatchettUS firms are likely to benefit from pre-Christmas certainty in a boost overall for global economy, after an extension was agreed between Donald Trump and China over a trade deal.
The extension should allow firms to plan and buy in from overseas ahead of the important Christmas period, without fears of raised tariffs making products more expensive.
Susannah Streeter, head of money and markets, Hargreaves Lansdown, explains the situation:
“There’s more optimism in the air as a tariff truce between the US and China holds, with hopes the global economy will withstand the trade blow a little better.
“Oil prices have crept higher in expectation of higher demand for energy around the world. The FTSE 100 has opened higher, even though the UK labour market shows more signs of deterioration. Nevertheless, the picture is broadly stable, and investors appear to be taking a glass half full approach to the snapshot.
“A longer-lasting trade deal with between China and the US looks to be on the cards, after Trump granted another extension to talks amid a warming up of relations between the two nations.
“The delay on imposing crippling US tariffs on Chinese goods will be welcome news, especially for American retailers in the run-up to the crucial Christmas season. It will enable companies to import clothing electronics and toys at a lower tariff rate of 30%, and will provide much needed certainty, at least for the short term, on costs.”
Keeping money from your partner? You're not alone, says expert
10:58 , Karl MatchettMore than half of Brits (51%) are “keeping secrets” about money, says Shawbrook Bank after a recent survey - with almost a quarter (22%) saying they keep financial details from their partner.
That’s not always for negative reasons, with 24% saying they are saving on the quiet to surprise someone else.
Sally Conway, Savings Expert at Shawbrook Bank said: “It’s clear that many of us are keeping money secrets - whether it’s to treat ourselves, surprise a loved one, or simply because we don’t think it’s worth sharing. But when it comes to savings, being more open and proactive can really pay off.
“Keeping quiet about our finances often goes hand-in-hand with not taking action, like staying loyal to the same bank or leaving money in low-interest accounts. Even a small increase in interest rates can have a significant long-term impact. By being more open and engaged with our savings and with the right account, we can ensure our money is working as hard as possible. And that’s one secret worth sharing.”
Close Brothers launch SME dedicated team
11:20 , Karl MatchettThe UK bank Close Brothers have launched a new team called Scale Up, dedicated to helping small and medium-sized businesses grow.
It surrounds firms with facilities up to £350,000 and managing director George May said small firms getting “funding at the earliest stages remains one of the biggest challenges”, adding:
“Whether it’s a new start or a business scaling rapidly, our products now are now suitable from inception to £1bn+ in revenue, with specialist teams across invoice finance, asset-based lending, and syndications.”
There are around 5.5m SMEs in the UK, which together account for more than 60 per cent of the total private sector workforce.
Universal credit claimants hit record high
11:40 , Karl MatchettUniversal Credit claimants have reached a record eight million, according to official figures published on Tuesday. This unprecedented number for July 2025 marks the highest level since the benefit's introduction in 2013.
The latest data reveals a significant surge of over a million people in just one year, up from 6.9 million claimants in July last year.
Universal Credit is a payment designed to assist with living costs, available to those in low-income employment, as well as individuals who are out of work or unable to work.
The steep rise in the past year has been driven almost entirely by people who are not required to work, with 3.7 million in this category in July – a rise of 39% or 1 million since the same time in 2024.
Universal credit claimants hit record high of eight million people
Government lines up insolvency firm in case of Thames Water collapse
12:01 , Karl MatchettThe Government has appointed insolvency specialists to step up planning for Thames Water in case the troubled water company collapses.
Environment Secretary Steve Reed signed off the appointment, with Sky News reporting FTI Consulting will act as an administrator in case Thames fails to secure funding from lenders.
Contingency plans could see Britain’s biggest water firm placed into a special administration regime (SAR), meaning it would be put into an insolvency process.
More here from PA:
Government lines up insolvency firm in case of Thames Water collapse
Pasta Evangelists to open 100 new restaurants
12:35 , Karl MatchettFresh pasta specialist Pasta Evangelists are planning to open 100 new restaurants, creating 1,500 jobs.
The plan is to invest £30m in new openings including half in so-called ghost kitchens or dark kitchens which essentially prepare food for takeaways but are not sit-in locations.
“If you are just doing delivery only you can obviously only be making delivery-only cash,” Finn Lagun, co-founder, said to The Times. “But if you dine in as well, you get the dine-in cash, alcohol sales and offer our events like pasta-making experiences, which are very high margin.”
Climate change is significantly increasing subsidence risks in UK, says ABI
13:00 , Karl MatchettSubsidence-related insurance claims totalled £153 million in the first half of 2025, as households felt the impact of the warm and sunny weather, according to figures from the Association of British Insurers (ABI).
Over the first six months of the year, insurers supported nearly 9,000 households in recovering from subsidence damage, with the average payout per claim standing at £17,264.
Subsidence can happen when ground beneath a building sinks, pulling the property’s foundations down with it.
More here.
Reeves’ NICs hike stunting growth and pushing up food prices, Bank says
13:37 , Karl MatchettRachel Reeves’ £25 billion national insurance raid has contributed to sluggish growth and pushed up food prices, the Bank of England said.
The Chancellor put up employers’ contributions in her first budget, with the increases coming into effect in April this year.
Increased national insurance contributions (Nics) and uncertainty caused by the tax rise have “weighed on growth”, according to businesses, the bank’s latest monetary policy report said.
The report also noted that higher labour costs are contributing to food price inflation, partly because of increases in minimum wages and the impact of the increase in Nics.
A “relatively high proportion of staff” in food manufacturing and retail are paid at or close to the national living wage, which increased by 6.7% in April.
Reeves’ Nics hike stunting growth and pushing up food prices, Bank says
US stocks set to rise, FTSE gives up gains
13:58 , Karl MatchettUS stock markets are set to open higher when trading begins shortly.
The S&P 500 is up 0.11 per cent, with the Nasdaq climbing 0.45 per cent and the Dow Jones up 0.5 per cent.
In the UK earlier gains have been largely wiped out for the FTSE 100 which now remains up by just 0.18 per cent.
The Euro Stoxx is almost flat, at 0.08 per cent to the good.
Holidays officially a ‘realistic’ part of later life, says pensions body
14:30 , Karl MatchettHolidays are considered a "valued and realistic" component of later life, according to Pensions UK, a body that sets retirement living standards. These benchmarks are designed to help individuals understand the financial provisions required to maintain a desired lifestyle in retirement.
Pensions UK’s regularly updated standards serve as a guide, allowing people to use their current cost of living as a reference for future financial needs. The framework outlines three distinct levels: "minimum," which covers basic needs with some allowance for leisure; "moderate," offering greater financial security and flexibility; and "comfortable," providing significant financial freedom and scope for luxuries.
Full details:
Holidays officially a ‘realistic’ part of later life, says pensions body
Pensioners could be set for a £500 boost to state pension next year – here’s why
15:00 , Karl MatchettPensioners could be set for a boost from April next year, with the state pension looking set to rise by up to £538.
That’s because of the rules around the state pension triple lock and how recent economic data sets out the likelihood of a rise.
At present, increases to the state pension are decided by either inflation, wage growth or 2.5 per cent – whichever is the highest. That is to ensure pensioners’ income doesn’t leave them trailing as living costs continue to increase – though with people living longer and the pension bill escalating rapidly, change is likely to come in the future.
Employment data released on Wednesday shows the UK job market slightly cooling, with lower vacancies at present still counteracted by wage growth – one of the three factors dictating state pension payment changes.
Here are the key things to know - and why more money in might hit some with a new tax bill:
Pensioners could be set for a £500 boost to state pension next year – here’s why
FTSE 100 falls flat , US stocks rise
15:54 , Karl MatchettA final quick check-in on the stock market movements before we call it a day.
The FTSE 100 has dipped this afternoon and is now flat for the day, with FTSE 250 firms down 0.2%.
Over in the US it’s a positive start however, the Nasdaq up 0.58% the Dow a full 1.05% up and the S&P 500 well in the green too, 0.73% up.
US inflation data came in at 2.7%, a lower rise than expected, meaning investors are now betting the Fed lowers interest rates next time out - so are piling back into equities instead.
