The FTSE 100 is down 0.1 per cent in early trading. Among the companies with reports and trading updates today are Dowlais Group, Just Group and Keywords. Read the Tuesday 13 August Business Live blog below.
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Just Group shares top FTSE 350 risers
Market open: FTSE 100 up 0.3%; FTSE 250 adds 0.2%
London-listed stocks have inched higher at the open amid broader gains in the run-up to crucial inflation numbers in the US and the UK.
The indices are set to extend their rally for a third consecutive session after closing lower for a second straight week on Friday.
Pharma and biotech and industrial support services lead broader gains with a 0.7 per cent rise each.
Most sectors trend upwards, while automobile and parts lead declines, pulled down by a 10.2 per cent fall in Dowlais Group.
The company has sunk to the bottom of the FTSE 250 after it said it was exploring a potential sale of its GKN Powder Metallurgy unit, among other options, and cut its annual revenue forecast.
The sectoral index fell to its lowest level since early 2009.
Among other stocks, Just Group has surged 10 per cent to top the FTSE 250 after it said it expected to exceed its previous 2024 profit forecast after its first-half earnings surpassed market expectations.
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'We are off to a good start in a week full of UK data'
Sam North, market analyst at eToro:
'Following a significant wobble in the US jobs report at the beginning of the month, eyes were on the UK's report to see how contagious it was. The weaker-than-expected report out of the States spooked the market, which contributed to the big sell-off last Monday, but those wanting to see similar headlines out of the UK were left disappointed.
'We are off to a good start in a week full of UK data. The jobs data sparked a strong market reaction, driven by a significant drop in the unemployment rate and a notable increase in employment figures.
'This robust labour market performance has more than compensated for slightly softer wage growth, which was influenced by the previous year's NHS bonus payments.
'As a result, we saw GBP/USD gain momentum, lifting from 1.2779 to a session high of 1.2801, underscoring market confidence in the UK's economic resilience. The focus will now move to tomorrow’s inflation report, with the Bank of England hoping to see a number steady at around 2%.'
Wage growth slows to lowest for more than two years - but UK's rate of unemployment also drops
UK wage growth slowed to its lowest for more than two years as the rate of unemployment also surprisingly dropped, according to official figures.
The Office for National Statistics (ONS) revealed that regular wage growth was 5.4 per cent year on year over the three months to June.
However, this slipped from 5.7 per cent in the previous three months and represented the smallest increase since the period to July 2022.
Dowlais eyes asset sale
Dowlais Group is exploring a potential sale of its GKN Powder Metallurgy unit among other options, after the company cut its annual revenue forecast due to subdued production volumes at its automotive unit.
The company, which was spun off from aerospace supplier Melrose Industries in April 2023, said it now expected its 2024 adjusted revenue to fall by mid to high single-digits.
It had earlier expected its 2024 revenue to be 'slightly below' the year-ago level.
The unit Dowlais is exploring options for manufactures powder metal parts for the automotive and industrial sectors and is the group's second-largest business by revenue.
Dowlais also sold its hydrogen business for a nominal amount and will take a £18million hit from the disposal in 2024, the group said.
'The labour market is continuing to recover'
Thomas Pugh, economist at RSM UK:
'The labour market looks like it is continuing to recover after last years mini-recession.
'Employment grew by 97,000 in the three months to June compared with the previous three months. This, combined with a 27,000 rise in the number of inactive people, which now stands at 9.41m – some 22.2% of the working age population – was enough to bring the unemployment rate back down to 4.2%.
'If wage growth does continue to fall over the rest of this year, it would give the MPC ample cover to cut rates again towards the end of the year, probably in November, and then be more aggressive in its rate cutting cycle in 2025, so we currently have four cuts pencilled in for next year.'
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Just Group ups guidance
Just Group has upped its 2024 profit forecast after the insurer's first-half earnings surpassed market expectations on strong new businesses in retail and pension risk transfers.
The firm, which specialises in annuities - also known as pensions that pay a fixed income for life - has reaped the benefits of soaring demand for insurance for corporate pension schemes known as bulk annuities.
Underlying operating profit rose 44 per cent to £249million in the six months to 30 June, compared with analysts' average forecast of £208million in a company-compiled consensus.
In March, the London-listed company forecast at least double its 2021 operating profits of £211million for this year.
Just Group said on Tuesday it expects to 'substantially' exceed that forecas
Unemployment falls as wage growth eases
The UK unemployment rate fell to 4.2 per cent in the three months to June 2024, beating forecasts of 4.5 er cent, as wage inflation also eased over the period, fresh data from the Office for National Statistics shows.
Average weekly earnings, excluding bonuses, were 5.4 per cent higher than a year earlier during the period, in-line with forecasts and down from 5.8 per cent in the previous three-month stretch.
The Bank of England said it would continue to keep a close eye on wage growth when it cut interest rates on 1 August after keeping them at a 16-year high of 5.25 per cent for nearly a year.