By Lars Mucklejohn
London’s FTSE 100 fell on Tuesday as markets trimmed their bets on near-term interest rate cuts after government data showed signs of continued tightness in the labour market and US inflation rose more than expected. Elsewhere, Tui shareholders have approved the firm’s decision to delist from the London Stock Exchange.
The blue-chip index closed 0.81 per cent lower at 7,512.28, while the FTSE 250, which is more aligned with the health of the UK economy, dropped 1.46 per cent to 18,923.83.
Latest figures from the Office for National Statistics showed annual wage growth including bonuses averaged 5.8 per cent between October and December, down from last month’s upwardly revised figure of 6.7 per cent but slightly above the 5.7 per cent expected by economists.
Excluding bonuses, the figure was 6.2 per cent, compared to the roughly 6.0 per cent predicted by experts.
According to the ONS’s latest estimates, the unemployment rate fell to 3.8 per cent, down from 3.9 per cent in the previous quarter.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said “investors assess there is still considerable way to go before stubborn inflation has been tamed”.
She added: “Inflation-busting pay rises are still the norm, and there is concern that if staff costs stay high, businesses will be more reluctant to stem price increases.”
Across the pond, US inflation came in ahead of expectations in January due to elevated housing costs, making it more likely that the Federal Reserve will wait until the summer to start cutting interest rates.
The news sent the pound down 0.25 per cent against the dollar.
Investors are now looking ahead to fresh inflation data on Wednesday.
Shareholders in Tui have approved the delisting of Europe’s largest travel firm from the London Stock Exchange in favour of its listing in Germany.
The company posted a record fiscal first quarter on Tuesday morning amid booming travel demand following last year’s post-Covid rebound as it urged shareholders to back its plan for a single listing.
It reported a historic €4.3bn (£3.67bn) in revenue for the period from 1 October 2023 to 31 December 2023, amid booming travel demand following last year’s post-Covid rebound. Shares closed 0.2 per cent lower in London.
Luxury carmaker Aston Martin is in talks with bankers over how to handle its £1.1bn debt pile, its executive chairman Lawrence Stroll has said.
In an interview with Bloomberg Television, Stroll said: “We are currently studying with our bankers the most appropriate actions of how to deal with it.” Shares rose 1.1 per cent.
Shares in Arm soared more than 40 per cent in New York on Monday in a rally following bumper third-quarter earnings from the Cambridge-based chipmaker last week, which decided not to IPO in London last year.
The stock has risen nearly 100 per cent since it reported results, which would make it the third-biggest stock on the FTSE 100 if it were listed in London.
Software company Gresham Technologies has secured a contract worth $1.5m (£1.2m) for its Clareti Control platform, designed to help financial institutions control their data. Shares rose 1.6 per cent.
