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A mixed UK jobs report left the London stock market similarly mixed early Tuesday, as investors awaited the day’s main event - a US inflation reading coming a day before the next Fed rate decision.
The FTSE 100 index opened up 6.31 points, or 0.1%, at 7,452.28. The FTSE 250 was up 9.91 points, or 0.1%, at 18,829.35. Meanwhile, the AIM All-Share was down 1.30 points, or 0.2%, at 829.18.
The Cboe UK 100 was up 0.1% at 745.63, the Cboe UK 250 was down 0.2% at 16,241.56, and the Cboe Small Companies was up 0.1% at 13,048.17.
The UK unemployment rate rose in the three months to October, figures from the Office of National Statistics showed. Between August to October 2022, the UK unemployment rate was 3.7%, up from 3.6% in the previous period of May to July.
The average rate of annual pay growth from August to October for both total and regular pay was the same at 6.1%. This compared to growth in average total pay of 6.0%, and growth in regular pay of 5.7%, from July to September. UK consumer price inflation was 11.1% in October.
Analysts suggested that wage growth, though still falling well short of inflation, sill will be a concern for the Bank of England, ensuring its foot remains on the monetary policy brake in the short term.
‘So far it does not look as if a wage price spiral is emerging,’ commented James Richard Sproule, chief UK economist at Handelsbanken. ‘This data reinforces our view that the Bank of England’s Monetary Policy Committee will be raising interest rates by 50 basis points to 3.5% on Thursday.’
The pound was quoted at $1.2259 at early on Tuesday in London, lower compared to $1.2267 at the equities close on Monday.
The UK economy was under additional pressure due to widespread strike action this week. Hopes of a major breakthrough in the rail dispute were shattered after Network Rail workers rejected a pay offer. Members of the Rail, Maritime and Transport union will now press ahead with two 48-hour strikes at Network Rail and 14 train companies starting from Tuesday and Friday.
The RMT said 63.6% voted to reject Network Rail’s offer on an 83% turnout.
In London, Shell rose 1.3% after it announced the sale of two offshore production sharing contracts in the Baram Delta of Malaysia.
The base consideration of the sale is $475 million, with additional payments of up to $50 million between 2023 and 2024, contingent on commodity prices.
‘Malaysia remains one of our eight core Upstream positions worldwide and we will continue to help power the country‘