Salaries fall for first time in six months in boost for hopes for interest rate cuts
Salaries have fallen for the first time in six months, boosting hopes of a Bank of England rate cut later this summer.
Average salaries slipped 0.1pc to £38,765 from April to May, the first decline since last October, according to Adzuna’s closely-watched jobs report.
Although the decline is small, slowing wage growth could ease fears about a future uptick in inflation and bolster the chance of a rate cut by the Bank later this year.
The Bank held rates at 5.25pc again last week but economic indicators suggest a cut to borrowing costs is in the offing.
Inflation fell back to the Bank’s 2pc target for the first time in three years last week, paving the way for a rate cut as soon as August.
Adzuna’s monthly jobs report gives a snapshot of UK job vacancies. The company supplies its real time data to the Cabinet Office and Office for National Statistics labour market indices.
Job vacancies were broadly flat from April to May, rising by just 77 vacancies to 854,248.
The figure was 18.7pc below May last year, signalling fewer job openings and more normal pay growth, which will ease concerns among the Bank’s policymakers that the labour market is running too hot still.
Adzuna co-founder Andrew Hunter said the salary fall was “pointing to a slightly less tight labour market”.
Read the latest updates below.
9:21AM
German business confidence falls in recovery setback
Germany’s business outlook has declined for the first time in five months in a blow to the recovery of Europe’s largest economy.
The Ifo business climate indicator declined from 89.3 in May to a three-month low of 88.6 in June.
Ifo president Clemens Fuest said: “The German economy is having difficulty overcoming stagnation.”
He pointed to Germany’s dominant manufacturing sector, where bosses “were gain more skeptical for the monts ahead”.
“They were particularly by the declining order backlog, but were somewhat more satisfied with current business,” he added.
Jack Allen-Reynolds, deputy chief eurozone economist at Capital Economics, said he felt the Ifo indicators have been “overstating the weakness in the economy for some time”.
He said: “Looking ahead, we expect the economy to continue growing at a slow pace. We forecast GDP to rise by 0.2pc in 2024 as a whole.”
9:06AM
Apple faces huge fine after EU says App Store violates competition rules
Apple risks billions of euros in fines after the European Union found the iPhone maker’s App Store to be violating the bloc’s landmark digital competition rules.
The European Commission informed Apple in a “preliminary view” that the “App Store rules… prevent app developers from freely steering consumers to alternative channels for offers and content”.
It opens a new front in the increasingly bitter fight between the US tech giant and Brussels over the EU’s new Digital Markets Act (DMA).
On Friday, Apple said it would delay rolling out recently announced AI features in Europe because of “regulatory uncertainties” linked to the DMA.
The sweeping law seeks to rein in the world’s biggest tech firms, including Apple, by forcing them to open up to competition in the 27-country EU.
But for Apple, the new rules are a significant challenge to its walled garden and it has openly accused the DMA of creating greater privacy and security risks for users.
This is the first time the commission has levelled a formal accusation against a tech firm under the new rules, after opening the first DMA probes into Apple, Google and Meta in March.
Apple faces a fine worth billions of euros from the EU over its App Store
Credit: AP Photo/Kathy Willens
8:40AM
FTSE slumps ahead of US inflation data
The FTSE 100 edged lower as investors turned cautious ahead of key inflation data in the United States.
The blue-chip index was down 0.1pc after touching a two-week high on Friday, while the mid-cap FTSE 250 was down 0.4pc.
The energy sector fell 0.3pc, in tandem with oil prices, as concerns that US interest rates could stay higher for longer strengthened the dollar.
Industrial miners slipped 0.9pc amid concerns of muted Chinese demand, which also pulled down copper prices.
In the US, the personal consumption expenditure numbers (PCE) are due on Friday. Investors are banking on the data to show a renewed moderation in inflation.
Among individual stocks, Prudential gained 5.6pc to be the biggest gainer on the FTSE 100 after the insurance group said it planned a $2bn share buyback programme, to be completed by mid-2026.
Shares of THG Group gained as much as 5.5pc but quickly fell back to gains of just 0.2pc after the ecommerce company agreed to sell its portfolio of luxury goods website to Fraser’s Group for an undisclosed sum. Fraser’s Group was up 0.9pc.
Britvic shares were up as much as 10.3pc to lead the FTSE 250 after Pepsi effectively gave its blessing to a potential takeover by Carlsberg.
8:19AM
Gas prices edge lower despite unplanned outages
Natural gas prices have hovered between small gains and losses as the market absorbed the impact of unplanned disruption to supplies.
Dutch front-month futures, the European benchmark, fell as much as 0.9pc after earlier gains following the latest outage at the Hammerfest plant in Norway.
In Australia, production resumed at the Wheatstone plant after some disruption.
8:06AM
UK markets fall at the open
Stock markets in London have dropped at the start the final full week of general election campaigning amid uncertainty also caused by the parliamentary poll in France.
The FTSE 100 has moved 0.1pc lower to 8,227.61 while the midcap FTSE 250 fell 0.2pc to 20,408.55.
7:59AM
Frasers to buy THG’s luxury websites as it builds premium offer
Mike Ashley’s Frasers Group has announced its deal with THG will also include the takeover of a series of its luxury brand website.
The House of Fraser and Sports Direct owner have agreed on a partnership across several areas, which will include Frasers launching its consumer credit and loyalty feature, Frasers Plus, across THG’s tech platform Ingenuity.
It will also be acquiring THG’s luxury brand portfolio including Coggles, strengthening its premium portfolio which already includes the suit retailer Flannels.
Frasers’ chief executive Michael Murray said it marked an “exciting step” in its plan to launch the feature across more third-party platforms.
Frasers is owned by Sports Direct founder Mike Ashley
Credit: Lucy North/PA Wire
7:46AM
Pepsi gives its blessing to Carlsberg’s takeover bid for Britvic
PepsiCo has effectively given its blessing to Carlsberg’s efforts to secure a takeover of Robinsons squash maker Britvic after it rejected a £3.1bn takeover approach from the Danish beer maker.
The soft drinks maker said it has agreed to waive the change of control clause in its bottling arrangements it has with Britvic, removing a potential barrier to the deal going ahead.
Carlsberg is considering its position after the British drinks giant confirmed on Friday that it had rejected two offers, which it claimed had “significantly undervalued” the business.
Britvic’s share price surged 16pc in response to the announcement.
It comes as London’s beleaguered stock market grapples with a wave of foreign takeovers, as international buyers take advantage of undervalued British stocks.
Pepsi has waived its right to object to a takeover of Britvic through a change of control clause in its contract
Credit: AP Photo/Gene J. Puskar
7:27AM
THG announces Frasers deal ahead of shareholder meeting
British tech champion THG has announced a partnership with Mike Ashley’s Frasers as it seeks to shore up support ahead of its annual general meeting.
The online retailer behind brands including Lookfantastic and Glossybox said it would work with Frasers on a number of projects, including courtier management services and revamping its Australian warehouse and logistics operations.
It will also integrate the Frasers Plus loyalty programme into its Ingenuity checkout software.
THG, which also owns brands such as Cult Beauty and LookFantastic, has struggled to shrug off pressure from shareholders.
Last month, activist investor Kelso said it was planning to vote against THG’s chairman at its annual meeting.
Meanwhile, THG has become embroiled in a bitter High Court legal dispute with a former Australian business partner over claims of unpaid bills.
THG said today that it was leaving its revenue guidance unchanged.
THG founder Matthew Moulding
7:13AM
Election result likely to salvage ‘sluggish’ jobs market
Adzuna co-founder Andrew Hunter said the Conservatives and Labour Party had both focused on the need for more jobs in healthcare and manufacturing, and these industries had seen vacancies drop by more than 20pc over the past year.
He said:
The UK job market has been met with resistance in the past few months but the upcoming general election may have the potential to salvage the situation.
Any outcome is likely to move the needle on the sluggish job market, with both the Conservative and Labour parties pledging to create more jobs.
Jobs in the legal and travel sectors were the worst hit, with salaries declining 1.5pc and 1.2pc respectively.
Unemployment recently reached 4.4pc, its highest level in two and a half years.
6:51AM
Good morning
Thanks for joining me. We begin the week with labour market figures which could boost hopes for interest rate cuts from the Bank of England.
Monthly average salaries have fallen for the first time since last October, according to Adzuna’s closely-watched jobs report.
Although the decline is small, slowing wage growth could ease fears about a future uptick in inflation and bolster the chance of a rate cut by the Bank later this year.
5 things to start your day
1) Post Office suffers leadership crisis amid Horizon investigation – Fresh expertise parachuted in ‘to change company culture and rebuild trust’
2) Rishi Sunak’s startup fund pulls the plug on dozens of companies – Scheme set up to support new businesses through Covid is seeking to recover £5m
3) Former M&S chief’s motor leasing giant faces debt crunch – Slump in second-hand electric car prices has spooked car fleet’s investors
4) China agrees to electric car tariff talks as EU fights to avoid trade war – Automotive industry fears crackdown on Chinese EVs would spark tit-for-tat tariff rises
5) Britain’s ‘queen of pottery’ slumps to £1.4m loss – Sharp rise in production and staffing costs push homewares brand into the red
What happened overnight
Asian shares were mostly lower after US stocks coasted to the close of their latest winning week on Friday, even as Nvidia’s stock slowed further from its startling run.
In Tokyo, the Nikkei 225 index rose 0.7pc to 38,869.94, making it the sole major benchmark in Asia to post gains on Monday.
The yen weakened to 159.93 per dollar during morning trading.
Minutes of the Japanese central bank’s last policy meeting released Monday put the yen under renewed pressure as it indicated that “any change in the policy interest rate should be considered only after economic indicators confirm that, for example, the CPI inflation rate has clearly started to rebound and medium-to long-term inflation expectations have risen.”
Elsewhere, Hong Kong’s Hang Seng dropped 1.2pc to 17,815.42, while the Shanghai Composite lost 1pc to 2,969.59.
Australia’s S&P/ASX 200 dipped 0.7pc to 7,740.80. South Korea’s Kospi was down 0.7pc to 2,763.95.
On Friday, the S&P 500 slipped 0.2pc to 5,464.62, but it remained close to its all-time high set on Tuesday and capped its eighth winning week in the last nine. The Dow Jones Industrial Average edged up less than 0.1pc to 39,150.33, while the Nasdaq Composite dropped 0.2pc to 17,689.36.