London pre-open: Stocks seen flat after jobs data, retail sales
Sharecast
Published Jul 11, 2023 07:56
London pre-open: Stocks seen flat after jobs data, retail sales
Sharecast - The FTSE 100 was called to open unchanged at 7,274.
Figures out earlier from the Office for National Statistics showed that wages grew more than expected in the three months to May, raising the chances of further rate hikes from the Bank of England.
Wages grew 7.3%, up from 7.2% in the previous quarter and coming in above expectations for a 7.1% increase.
Including one-off bonuses, wages rose 6.9% during the period, up from 6.7% and versus expectations of 6.8% growth.
The figures also showed that the unemployment rate rose was 4% in the three months to May, up from 3.8% in the previous three months.
Capital Economics said: "The labour market became less tight in May and there are some signs of momentum in wage growth slowing a bit. But with wage growth still well above the levels consistent with the 2% inflation target, this won’t ease the Bank of England’s inflation fears significantly.
"Our forecast is for the Bank to raise interest rates by 25 basis points (bps) in August, from 5.00% now to 5.25%, but we can’t rule out another 50bps hike. Much will depend on June’s CPI inflation data due next Wednesday."
Separately, a survey showed that total retail sales increased by 4.9% in June as the warmer weather brought shoppers out for items such as beach towels and barbeque food.
The rise compared with a fall of 1% in June last year and is above the three-month average growth of 4.6% and the 12-month average growth of 4.0%, the British Retail Consortium survey showed.
On a like-for-like basis, retail sales increased by 4.2% in June, against a decline of 1.3% in June 2022. Food sales increased 9.8% on a total basis and 10.1% on a Like-for-like basis over the three months to June, while non-food sales rose 0.3% on a total basis and fell 0.5% on a like-for-like basis over the three-months to June.
“Retail sales growth ticked up slightly in June as hot weather prompted purchases of summer essentials. Sun-seekers headed to their favourite retailers to buy swimwear and beach towels, and outdoor games, garden furniture and barbecue food were boosted as families came together to celebrate Father’s Day," said BRC chief executive Helen Dickinson.
However, she added that people were much more cautious about big-ticket purchases like furniture and technology equipment.
"Consumer confidence remains fragile. But, with headline food inflation easing for two months in a row as prices of essentials start to fall thanks to stiff competition and consumers continuing to shift shopping patterns to mitigate as much inflation as they can, confidence could improve."
In corporate news, energy company Centrica (LON:CNA) said it had signed an $8bn deal with US-based Delfin Midstream to buy 1.0 million of liquefied natural gas a year for 15-years.
Get The App
The agreement will see Centrica take delivery of around 14 LNG cargoes per year from the Delfin Deepwater Port, located 40 nautical miles off the coast of Louisiana, and could provide enough energy to heat 5% of UK homes for 15 years, the company said in a statement.
Read more on Sharecast.com
Written By: Sharecast
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.