Latest figures from the ONS show wage growth ticked down but remained high at 6.1%, while unemployment came to 3.9%.
Meanwhile, Domino’s and Persimmon are reporting results today.
The FTSE is set for a big jump when markets open, set to open almost 1% higher
DWP secretary says ‘Our plan is working’ as payrolled employees grow
07:34 , Daniel O’Boyle
Secretary of State for Work and Pensions, Mel Stride MP said: “Our plan for the economy is working. Employment is up on the year and the number of people on payrolls is at a record high.
“But our work is not done. Our Back to Work Plan will help a million people to find, stay and succeed in employment. With the next generation of welfare reforms, we’re reducing the number of people on the highest tier of incapacity benefits by 371,000 – people who will now receive support back into work.
“And with the tax cuts announced in last week’s Budget we will boost the labour force by the equivalent of 200,000 workers, while putting put £900 back into the pockets of 27 million hardworking people.”
‘Encouraging signs’ for June rate cut
07:24 , Daniel O’Boyle
Paul Dales, Chief UK Economist at Capital Economics, says: “The easing in wage growth in January is probably still a bit too slow for the Bank of England’s liking. But there are encouraging signs that a more marked slowdown is just around the corner and that an interest rate cut in June is possible.
“The easing in employment growth from +72,000 in the three months to December to -21,000 in January (consensus +10,000, CE -70,000) and rise in the unemployment rate from 3.8% to 3.9% (consensus 3.8%, CE 4.0%) suggests the labour market loosened a tad more than the consensus forecast.”
“What’s more, the further fall in the number of job vacancies from 928,000 in the three months to January to a 32-month low of 908,000 in the three months to February suggests the labour market continues to loosen more than the unemployment rate is letting on.”
House market slowdown sends Persimmon profit plunging by over 50% for 2023
07:22 , Michael Hunter
Profit before tax at the UK’s second biggest house builder slumped by over 50% for 2023, as the slowdown in the house market took hold.
Persimmon also said that 2024 trading in the “southern and eastern counties remains more challenging with weaker pricing”. It added it was “prepared for 2024 to be another challenging year.”
The FTSE 100 firm made £351.8 million in profit before tax for 2023, down from £730.7 in 2022.
The decline came as interest rates rose to a 16-year peak by August at 5.25%, after 14 consecutive hikes from the Bank of England. The slowing demand in the market for new homes meant Persimmon completed just over 9,900 properties, a drop of third.
Nonetheless, the average selling price rose by 3% to £255,752.
The York-based firm said the number of 2023 completions was ahead of expectations, while 2024 had started as it expected.
Dean Finch, CEO, said:
“ Although the near-term outlook remains uncertain, the significant pent-up demand for homes remains unchanged.
“Customers want quality homes in the places where they want to live and work, and affordability is crucial. During the year we have continued to take further steps to strengthen the business and we are well placed to meet this demand.”
Domino’s Pizza eyes expansion to 2,000 stores
07:21 , Simon Hunt
Domino’s Pizza today said it was eyeing growing its estate to as many as 2,000 stores by 2023 with sales increasing to £2.5 billion annually as it charted a course for rapid expansion. It currently has 1,300 stores.
The firm posted sales growth of 5.8% to £1.57 billion in 2023, with underlying profits flat at around £100 million. Net debt decreased by £20.5 million from the start of the year to £232.8 million.
CEO Andrew Rennie said: “We have alignment with our franchisees and there is a strong, motivated second generation talent coming through the franchisee ranks to help drive this growth.”
Monopolies watchdog bites back on vets
07:21 , Daniel O’Boyle
The Competition and Markets Authority is to launch a formal Market Investigation on the vet sector after an “unprecedented response” to its initial review.
It said it heard concerns about prices not being displayed on websites or made available until after treatment has happened, and potential overpayment.
Larger vet chains have rapidly been buying up independent practices in recent years. The CMA noted that vets rarely change branding when this happens, so it is not always clear who owns an individual practice.
Sarah Cardell, Chief Executive of the CMA, said: “We launched our review of the veterinary sector last September because this is a critical market for the UK’s 16 million pet owners. The unprecedented response we received from the public and veterinary professionals shows the strength of feeling on this issue is high and why we were right to look into this.”
FTSE 100 seen higher ahead of US inflation, Bitcoin at new record
07:18 , Graeme Evans
London’s FTSE 100 index looks set to make a strong start, bucking uncertainty elsewhere as traders await this afternoon’s release of US inflation figures.
IG Index reports that futures trading is pointing to a rise of about 70 points to 7738, following on from yesterday’s rise of just under ten points.
The improvement comes even though the S&P 500 index fell modestly for the second session in a row, driven by weakness for high value technology stocks.
Wall Street traders stayed on the sidelines ahead of the inflation print, which Deutsche Bank economists expect will show an unchanged annual rate of 3.1%.
The core inflation reading is likely to be around 3.7%, which the Federal Reserve may consider still too high to allow the first cut in US interest rates.
In Asia trading, the Shanghai Composite and Nikkei 225 have posted small declines in contrast to the 3% surge for Hong Kong’s Hang Seng index.
Bitcoin, meanwhile, continues to set new records after going through the $72,000 barrier for the first time.
‘ Bank of England may want to see more signs of stabilisation before any moves’
07:16 , Daniel O’Boyle
George Sweeney at personal finance site Finder.com, says that while the jobs and wages data shows signs of cooling, the Bank of England will likely need more evidence before cutting interest rates.
He says: “The British economy continues to cool, and some more cold water has just been poured onto the smouldering UK jobs market. The latest research from the ONS shows annual wage growth (including bonuses) dropping from 5.8% in the 3 months to December 2023 to 5.6% in the 3 month period ending January 2024.
“These figures, combined with the recent news of a technical recession, points towards an overall economic slowdown. However, the Bank of England may want to see more signs of stabilisation before making any moves with regards to the base rate. The Monetary Policy Committee (MPC) could need further, consistent data over the coming months to prove we’re out of the woods – which might mean some more pain ahead before things get better and rates start to drop.”
Vacancies falling but above pre-pandemic
07:07 , Daniel O’Boyle
ONS director of economic statistics Liz McKeown said: “Recent trends in the jobs market are continuing with earnings, in cash terms, growing more slowly than recently but, thanks to lower inflation, real terms pay continues to increase.
“The number of job vacancies has also been falling for coming up to two years, though the total remains more than one hundred thousand above its pre-pandemic level.
“Over the last year, there was little change in the proportions of people who are employed, unemployed or neither working nor looking for work, though the overall number of people in work is still rising.”
UK unemployment at 3.9%
07:02 , Daniel O’Boyle
The UK unemployment rate came to 3.9% in the three months to January.
Wage growth excluding bonuses ticked only slightly down to 6.1%. That represents more gains for employees who saw the real value of their pay deteriorate last year but is still faster than the Bank of England would like
The number of payrolled employees grew by 20,000, a little below expectations.
06:47 , Simon Hunt
Good morning from the Standard City desk.
Yesterday, two thick reports landed on the desk of Culture Secretary Lucy Frazer, one from media regulator Ofcom, the other from competition watchdog the CMA.
Only she and a handful of officials will know the contents of the tomes — and none of them are talking today.
The reports, into the RedBird IMI takeover bid for Telegraph Media Group, were originally commissioned by her in November, when she issued a Public Interest Intervention Notice into the Abu Dhabi ruling family backed offer.
Since then a chorus of Tory party grandees, including voices as varied as former prime minister Sir John Major, and ex-home secretary Suella Braverman, as well as figures such as the former head of MI6, have warned against allowing ownership of one of Britain’s key media assets to pass from the Barclay family to “an autocratic state”.
It is the hottest of hot potatoes for Ms Frazer and her boss Rishi Sunak, landing at a time when the Conservative party can ill-afford any more negative headlines.
Given the intense political sensitivities, and the timing, it seems highly unlikely that the takeover can go through in its current form, despite all the assurances about editorial independence that have been given by the bidders.
Here’s a summary of our other top stories from yesterday: