Market Report

Jobless rate rises to highest for nearly a year

Pay-wage-slip
Wage growth remains high

The FTSE 100 index closed 13.14 points or 0.16% higher to reach 8,428.13 points as traders digested a rise in unemployment and a continued rise in wage growth.

Traders also welcomed news that Anglo American may remain on the LSE after rebuffing a bid from BHP and announcing plans to sell parts of its business.

The UK’s unemployment rate rose to 4.3% in March, as expected, from 4.2% before. 

Average weekly earnings rose 5.7% in the three months to March, higher than expected but the same as the revised number for the previous three-month period. Excluding bonuses wages remained up 6.0%.

The unemployment rate has risen to its highest level for nearly a year while real pay growth remains at its highest level in well over two years, giving the Bank of England further food for thought on the timing of interest rate cuts.

Chancellor Jeremy Hunt said: This is the 10th month in a row that wages have risen faster than inflation which will help with the cost of living pressures on families.

“And while we are dealing with some challenges in our labour supply, including pandemic impacts, as our reforms on childcare, pensions tax reform and welfare come online I am confident we will start to increase the number of people in work.”


Greggs

Greggs

Fast food chain Greggs has made a “good start” to the new financial year and said investments to increase supply chain capacity were ”progressing well”.

The retailer reported like-for-like growth of 7.4% in the first 19 weeks of 2024, when there was ”continued good progress across all channels”.

However, rising wages continue to take a bite out of profit margins and “continue to be the biggest cost pressure for us,” said Roisin Currie, chief executive.

Management expects to meet expectations for the full year. 

Shares were down by 42p, or 1.5%, at 2776p at the close.


Anglo American

After rejecting a second bid from BHP yesterday, Anglo American has today set out plans for a major rejig of its portfolio, including selling off its De Beers diamond business and other units.

A sweetened £34 billion takeover approach from BHP for its rival Anglo American was rebuffed by the FTSE 100 mining group as “highly unattractive”.

BHP has raised its offer by 14.6% to 0.8132 BHP shares per Anglo share, implying a price of 2753p per share, compared with £25 under its 16 April approach.

The company said it would offer Anglo American up to two positions on the board of the combined group and is confident that it can obtain regulatory approvals.

A takeover would create the world’s largest copper miner, producing an estimated 10% of global output.

Analysts believe a bid of at least 2900p per share will be required to win support from Anglo’s board.

Shares in Anglo closed down 3.23% at 2619.5p.



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