Market report

Wages fall, jobless unchanged | luxury watches in demand

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5pm: London closes higher

The FTSE 100 closed 26.91 points higher at 7,536.06 as miners rebounded from yesterday’s China-induced falls.


7am: Wages fall

Wages fell by a record 3% when growth in pay took account of inflation, according to the Office for National Statistics.

Before inflation, growth in employees’ average total pay (including bonuses) was 5.1% and growth in regular pay (excluding bonuses) was 4.7% in the quarter April to June.

Britain’s unemployment rate held at 3.8% in the period, unchanged from the previous quarter. A year earlier it was 4.7%.

Chancellor Nadhim Zahawi said:  “Today’s stats demonstrate that the jobs market is in a strong position, with unemployment lower than at almost any point in the past 40 years – good news in what I know are difficult times for people.

“This highlights the resilience of the UK economy and the fantastic businesses who are creating new jobs across the country.

“Although there are no easy solutions to the cost of living pressures people are facing, we are providing help where we can. We are delivering a £37 billion package of help for households through cash grants and tax cuts so people can keep more of what they earn.

“And whilst we cannot completely shield everyone from these global economic shocks, we are targeting this support on millions of the most vulnerable people in our society: those on the lowest incomes, pensioners and disabled people.”


7am: Ted Baker sold

Fashion chain Ted Baker has agreed a takeover bid worth about £211 million from the US company that owns Reebok and a stake in former footballer David Beckham’s portfolio. Full story here


7am: Watches of Switzerland

Luxury watch chain Watches of Switzerland reported strong sales in the first quarter but warned of a potentially challenging trading environment in the second half.

Group revenue soared buy 25% at constant currency rates to £391 million (Q1 FY22: £297m), benefitting from de-stocking and pent up demand as showrooms re-opened following the COVID-19 lockdown

Luxury watch sales rose 32% to £342m, representing 87% of revenue (Q1 FY22: 87%) and luxury jewellery was 36% higher at £27m.

Brian Duffy, chief executive, said: “The first quarter continued with strong momentum throughout, and we carry this positive momentum into the second quarter. Despite the well-publicised concerns about the macro-environment, demand for our products remains robust with client registration of interest lists continuing to extend.”


7am: Sage acquisition

Accounting software firm Sage Group has acquired Lockstep, a Seattle-based provider of cloud native technology that automates accounting workflows between companies.

The acquisition of Lockstep accelerates Sage’s strategy for growth by broadening its value proposition for SMBs and by expanding Sage’s digital network.


Global markets

Wall Street extended a four-week positive trend on the back of a surprise rate cut in China. At the close, the Dow Jones, the Nasdaq 100 and the S&P500 gained 0.45%, 0.62% and 0.40%, respectively.

Beijing’s rigid adherence to a zero-Covid strategy has held back economic recovery as snap lockdowns and long quarantines batter business activity and a recovery in consumption.

In the US the market spotlight today will be on the release of housing starts data for July and for industrial production in June.

The weakened Chinese economy weighed on oil prices, as did speculation that a revived nuclear deal could mean higher production and in-turn, lower prices. 

Brent North Sea crude was down 3.1% at $95.10 per barrel and West Texas Intermediate was 2.9% lower at $89.41 per barrel.

The pound was trading at $1.2055 from $1.2138.



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