The release of unemployment and wage growth figures today kicked off a significant week for the UK economy.
Inflation figures are due tomorrow before the Bank of England begins its latest two-day policy meeting.
Ahead of President Trump’s state visit, Google said it planned to invest £5 billion in the UK as it looks to meet demand for AI services.
FTSE 100 Live Tuesday
- State pension set for 4.7% rise
- Trustpilot lifts margin outlook
- Google plans £5bn UK spending
Market update: FTSE 100 weakens, Kier and Trustpilot surge in FTSE 250
10:08 , Graeme EvansDollar weakness and downgrades for the shares of Haleon and easyJet today ensured the FTSE 100 index continued its recent lacklustre run.
Bets on a quarter point Federal Reserve interest rate cut and no change by the Bank of England have led the pound to its highest level since early July at $1.363.
Dollar earners under pressure included Rentokil Initial and Diageo as the FTSE 100 index weakened for a second day in a row - down 9.16 points to 9267.87.
The decline followed fresh records for the S&P 500 index and Nasdaq Composite as Wall Street welcomed signs of progress in US-China trade talks.
Announcements of US investment ahead of President Trump’s state visit, including a two-year spending plan by Google, failed to lift UK stock market sentiment.
The focus was on the latest UK labour market report, which showed the number of payrolled employees dropped by 6,000 in July and 142,000 over the year.
Pay growth including bonuses was 4.7%, a figure with implications for next year’s state pension and likely to be too high for Bank of England policymakers.
The biggest fallers in the top flight were the result of City downgrades, with Sensodyne firm Haleon down 10.2p to 346.5p after Barclays analysts moved to an Equalweight stance.
Low-cost airline easyJet reversed 2% or 12p to 460.3p as JPMorgan switched its recommendation to Neutral with a price target of 500p.
Other fallers in the FTSE 100 included Vodafone, down 1.6p to 85.6p, and Imperial Brands with a decline of 49p to 3117p.
Higher gold and silver prices meant Mexican miner Fresnillo spent another session on the top of the blue-chip index, up 4% or 84p to 2280p.
The FTSE 250 index rose 75.81 points to 21,722.40, led by Kier Group after the infrastructure services firm reported a record £11 billion order book.
Annual pre-tax profits improved in line with expectations by 6% to £125.4 million, while trading in the new financial year has been slightly stronger than hoped.
Shares surged 9% or 18p to 210p as Keir also declared a big jump in its final dividend, up 38% to 7.2p a share.
Trustpilot put back recent losses, rallying 8% or 15.6p to 216.2p after the consumer reviews platform upgraded its full year margin guidance alongside half-year results showing a 21% uplift in revenues.
Tesco sales momentum continues, grocery inflation eases
09:09 , Graeme EvansGrocery inflation has fallen slightly for a second consecutive month but prices remain 4.9% higher than a year ago, according to Worldpanel by Numerator.
Tesco’s share of the market reached 28.4% over the 12 weeks to September 7, up 0.8 percentage points compared to a year ago.
Britain’s largest grocer saw growth across all channels, with spending up 7.7% – its highest rate since December 2023.
Ocado was once again the fastest growing retailer, with sales rising by 11.9%.
Spending through the tills at Sainsbury’s increased by 5.4%, taking its portion of the market up to 15.1%. Lidl was the fastest-growing bricks and mortar retailer with sales up 11%, increasing its share to 8.2% from 7.8% in 2024.
Trustpilot lifts full-year guidance, shares up 6%
08:47 , Graeme EvansTrustpilot shares have rallied after half-year results today included an upgrade to the consumer reviews platform’s full year margin guidance.
The FTSE 250-listed group has maintained its outlook for high-teens constant currency revenue growth.
Bookings in the first half grew 17% in constant currency terms to $140 million, with revenue up 21% to $123 million.
Adjusted earnings came in ahead of expectations at $18 million, with a four percentage point increase in margin to 14.6% the result of operating leverage.
The group expects a similar margin figure across the year, a performance ahead of City expectations.
Chief executive Adrian Blair said the results showed the momentum of the platform.
He added: “Innovations like AI review summaries and semantic search are meaningfully advancing how consumers experience Trustpilot.
“Major enterprise wins like Boots, Barclays and Vimeo show the growing importance of customer trust and our platform to leading brands.”
Shares rose 6% or 13p to 213.6p, reducing their fall for this year to about 30%.
Peel Hunt said: “Bookings continue to grow well, and while there are investments pencilled in for the second half, we see potential for further outperformance, especially in full-year profit. We maintain our Buy rating and 380p target price.”
FTSE 100 lower, easyJet downgrade hits shares
08:25 , Graeme EvansThe FTSE 100 index has opened on the back foot, easing 18.39 points to 9258.64.
Low-cost airline easyJet fell 3% or 12.7p to 460.3p after JPMorgan cut its recommendation to Neutral with a price target of 500p.
Consumer healthcare products firm Haleon also came under pressure due to a broker downgrade, falling 93p to 347.3p.
Rio Tinto offered support to the top flight with a rise of 73p to 4704.5p, while Glencore lifted 2.3p to 309.15p.
The FTSE 250 index rose 10.34 points to 21,656.93, with Trustpilot up 21p to 221.6p and Kier Group up 7% or 12.5p to 204.5p following their half-year results.
State pension seen 4.7% higher under triple-lock
07:59 , Graeme EvansAverage wage growth of 4.7% in today’s labour market report represents a key figure in the triple lock formula, which dictates how much state pension is uprated by each year.
The triple lock aims to uprate state pension by whichever is highest of 2.5%, average wages and inflation each year.
The inflation data released next month will be the final piece in the puzzle, although as the figure currently sits at 3.8% it seems unlikely this will be the key figure.
An 4.7% uplift would see a full new state pension rise from its current level of £230.25 per week to £241.05 per week from April. Those retiring on the basic state pension would see their weekly income increase from £176.45 per week to £184.75.
Hargreaves Lansdown said the increase adds further pressure on the government as it battles an already burgeoning state pension bill.
Helen Morrissey, HL’s head of retirement analysis, said: “The government has committed to keeping the triple lock in place for the rest of this Parliament but longer term its future could be uncertain.
“With a review into state pension age also ongoing other options could include an extension of the current timetable with dates for state pension age running into the late 60s and beyond.
“However, consideration also needs to be given to the issue of healthy life expectancy and the reality that while we may be living longer this does not necessarily mean that everyone can continue to keep working.
“The state pension forms the backbone of people’s retirement income, and many people simply cannot afford to retire without it.”
UK firms boost value of trade with US - HSBC
07:29 , Graeme EvansThe value of payments made by HSBC’s business customers in the UK to those in the US surged by 23% in the year to June compared with the prior year.
Payments made to the UK from US business customers also rose by 13% year on year.
A separate survey by the bank of 2,000 UK businesses found a third said they now had more new customers in the US – compared with 16% reporting a decline.
Of those already trading with America, 37% said their revenues had increased, with a tenth reporting a significant rise. In contrast, a fifth reported falling revenues.
Jobless rate unchanged in July - ONS
07:07 , Graeme EvansThe UK’s unemployment rate stayed at 4.7% for the period between May and July, figures published by the Office for National Statistics showed today.
The estimated number of vacancies in the UK fell by 10,000 or 1.4% to 728,000 in June to August.
This is the 38th consecutive period where vacancy numbers have dropped compared with the previous three months, with the declines being seen in nine of 18 industry sectors.
The three-month figure for growth in average earnings including bonuses was also in line with City expectations at 4.7%.
This is slightly higher than the 4.6% recorded the previous month.
Annual growth in real terms, adjusted for inflation including owner occupiers' housing costs, was 0.7% for regular pay and 0.5% for total pay in May to July.
Capital Economics said: “With households’ inflation expectations at a six-year high in August, the stubbornness of wage growth will do little to ease the Bank’s concerns about the upside risks to inflation.
“That lends support to our view that the Bank will keep rates at 4% for the rest of this year.”
Google to invest £5bn in UK over next two years
07:06 , Graeme EvansGoogle has said it will invest £5 billion in the UK in the next two years to help meet growing demand for AI services.
The announcement, which comes as the US giant opens its new data centre in Waltham Cross in Hertfordshire, is expected to contribute to the creation of thousands of jobs.
The move comes amid reports that ChatGPT parent firm OpenAI and Nvidia will also unveil billions of dollars’ worth of investment into UK data centres this week, amid President Donald Trump’s state visit.
S&P 500 at new record as Alphabet hits $3tn, FTSE 100 higher
07:00 , Graeme EvansThe Nasdaq Composite last night rose by 0.9% to set another record high, while the S&P 500 index also set a new peak following a gain of 0.5%.
The shares of Alphabet rose 4% to leave the Google owner worth more than $3 trillion at Wall Street’s closing bell.
The tech-led improvement ahead of this week’s Federal Reserve meeting was accompanied by a rise of 0.1% by the Dow Jones Industrial Average.
A stronger pound impacted multinationals in the FTSE 100 index, which dipped 6.26 points to 9277.03. Futures point to a slightly stronger start at today’s opening bell.
The Nikkei 225 in Tokyo is up 0.5% but the Hang Seng index near its opening mark.
