UK jobless rate falls to 4.4 percent

Nicole Jeary
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UK jobless rate falls to 4.4 percent

Unemployment in the UK fell to 4.4 percent in the second quarter of 2017, the lowest level since 1975.

Unemployment for the quarter fell by 57,000 for the three months to June, marking the lowest level in over 30 years.

In addition, the figures released by the Office for National Statistics (ONS) revealed wage growth increased by 2.1 percent compared with a year previously. This marked a slight increase from 2 percent for the month before.

Ruth Gregory, UK economist at Capital Economics, said: “The latest labour market figures provided some signs that the tightening in the labour market may be leading to a recovery in wage growth at long last.”

Nevertheless, high inflation levels continue to impact upon real wages across the U.K. Inflation continues to hit 2.6 percent, with real earnings falling by 0.5 percent.

“The employment picture remains strong, with a new record high employment rate and another fall in the unemployment rate. Despite the strong jobs picture, however, real earnings continue to decline,” commented Office for National Statistics senior labour market statistician Matt Hughes.

Specifically, jobs were created in the construction, accommodation and food sectors, alongside the transport and storage industries.

Figures revealed that those on controversial ‘zero-hour’ contracts had also lessened, an encouraging development for many seeking more work stability.

“The number of workers born elsewhere in the EU continues to increase, but the annual rate of change has slowed markedly,” Hughes added.

Whilst Prime Minister Theresa May announced back in January her intention for the U.K to leave the single market as part of Brexit negotiations, it remains to be seen what the final agreement regarding EU citizens residing and working in the U.K will be.

Brexit negotiations continue to play out in Brussels, with key issues of migration, customs and trade being a key concern for both parties.

The latest figures caused the pound sterling to bounce 1 cent up against the dollar as the market reacted to the news.

Nestlé removes walnut from Walnut Whip as shrinkflation continues

Miranda Wadham
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Nestlé removes walnut from Walnut Whip as shrinkflation continues

Sweet manufacturer Nestlé have announced they will be removing the nut from the top of their Walnut Whip sweets, in the latest sign of ‘shrinkflation’.

The price of nuts has risen exponentially, causing Nestlé to remove the walnut from the top in its new versions of the sweets.

‘Shrinkflation’ has led to the downsizing of thousands of products as the cost of ingredients soar, meaning consumers are paying the same price for smaller products. According to figures from the Office for National Statistics, over 2,500 every day household products have shrunk in size over the past five years but continue to be sold for the same price.

Whilst chocolate bars have been subject to this controversy for some time, the ONS found that toilet rolls, coffee and fruit juice were also being sold in smaller packet sizes.

Indian buyers turn to London property as rules relax

Miranda Wadham
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Indian buyers turn to London property as rules relax
Indian buyers have become the second largest purchaser in Prime Central London, following a change in legislation increasing the amount of capital buyers can bring into the UK to $250,000 per person. Indian buyers now account for 22 percent of sales, according to London Central Portfolio’s latest sales audit, representing a 5 percent increase from two years ago. In terms of value, Indian buyers represented a third of the total spend over the last 12 months, with their average purchase price of £1.77 million being slightly higher than the market average of £1.6 million. In contrast, buyers from continental Europe have fallen significantly due to increased uncertainty following the UK’s Brexit vote, from 24 percent two years ago to 7 percent over the last 12 months South East Asian buyers took top spot as the largest buying population, representing 36 percent of all purchases. “London has remained attractive to international buyers as a safe haven asset class with the rule of law and proper title to property. As India has become a more challenging place to invest in with high loan interest rates and rising prices in the main urban centres, together with increasing global political and economic uncertainty, Indian buyers with a larger amount of capital to spend have increasingly turned to London as an investment destination of choice,” says Naomi Heaton, CEO of London Central Portfolio. “As sterling has weakened against foreign currencies, representing a 20 percent discount for USD denominated investors compared with two years ago, we are now seeing Indian buyers becoming an increasingly dominant force in the marketplace.”

Total eclipse of the… stock market?

Miranda Wadham
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Total eclipse of the… stock market?
As the financial industry quietens down for the summer, the stock market has stayed within a narrow range. Even as companies report earnings, many investors are sitting on the side lines waiting for signs of life. The markets are less volatile than they have been in the years since the 2008 financial crisis; however, there are indications that this could be about to change. “Insights into stock market trends often come from quirky places. Financial astrologists attempt to predict market trends based on the sun, moon and stars, while others make decisions based on unlucky coincidence and superstition”, says Mark Taylor, CEO of Selftrade from Equiniti. “With company valuations at unusual highs some are pointing to solar and astral events that are happening in the next month to make worrying predictions.” Much is being made in the US of the so called “Great American Solar Eclipse”, which takes place on August 21st. The Harriman Stock Market Almanac recently reviewed 15 solar eclipses visible from America since 1900, and found that just 13pc of the days before an eclipse experienced a positive return, compared with 47pc for the day itself and 80pc on the day afterwards. “On the day before and the day of each eclipse the average return of the Dow Jones index was minus 0.3 per cent, and the average on the day after the eclipse was just 0.2 per cent. The trend indicates that superstitions around eclipses still exist – will the pattern repeat next week?”

How low could the FTSE 100 fall?

Raymond Jones
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How low could the FTSE 100 fall?
The FTSE 100 has been on a hell of a run. Since intraday lows of around 5,500 February 11th 2016, the FTSE has rallied over 37%, recording a number of all-time record highs along the way. The FTSE 100 has been helped higher by a rally in base metals and a weakening in sterling following the EU referendum. Unfortunately for stock market bulls, these catalysts are starting to recede and Trump’s latest foray into international relations with North Korea is adding further pressure to share prices. Having given up over 200 points in less than two days, the FTSE 100 could be set for further falls, but where could it fall to? Key Support Levels The first level of support is at 7300. This level formed a double bottom in late June/early July which acted as a base for a leg above 7500. If this fails, one would eye 7244 and the 200-day moving average. This is also in close proximity to 7250, a key level of support held throughout March and April of this year. A significant break of 7250-7244 opens up the door to 7100 which we see as the most critical level of support in the near term. 7100 is the 23.60% Fibonacci retracement level of the rally starting February 2016 and acted as a support level in late January and April. A break to the downside here puts the bears in the driving seat. 7000 will offer a psychological level of support but as soon as we see a series of prints starting with a ‘6’ the market could well to take the FTSE down to 6798 and the 38.2% Fibonacci Retracement relatively quickly. Beyond this, we are looking at 6550 and 6300.

Dixons Carphone shares down 8pc after broker downgrade

Miranda Wadham
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Dixons Carphone shares down 8pc after broker downgrade
Electrical giant Dixons Carphone (LON:DC) fell over 8 percent in early trading on Friday, after a downgrade on its stock from Exane BNP Paribas. The group moved Dixons Carphone to an “underperform” rating after the retailer issued a near-term caution on profit. Exane BNP Paribas also said it was concerned about the mobile arm of the group in the long term. “With consensus, sentiment and forecast too optimistic in the face of macro headwinds, positive catalysts are hard to find,” the broker said. The downgrade comes just two months after Dixons reported a record pre-tax profit in a “challenging” market. Shares are currently trading down 8.48 percent at 243.18 (0951GMT).  

Old Mutual share price down despite strong figures

Miranda Wadham
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Old Mutual share price down despite strong figures
Financial giant Old Mutual (LON:OML) saw shares sink in early trading on Friday, despite reporting strong figures for the first half. Pre-tax operating profits jumped to £969 million, from £708 million the year previously, increasing its interim dividend by 32 per cent to 3.53 pence. Earnings per share rose 33 per cent to 10.6p. The company’s share price sunk on the news however, as investors question whether the company is really on the road to recovery after being hit badly by a fall in the South African rand earlier this year. In a statement, the company said its main markets “remain subject to significant political and economic uncertainties but our businesses are well managed and resilient”.

June sees slowdown across car production and construction sectors

Miranda Wadham
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June sees slowdown across car production and construction sectors
Industrial output rose 0.5 percent in June, according to official figures from the Office for National Statistics on Thursday. Whilst this jump surprised analysts, it is likely to be down to a of seasonal oilfield maintenance, which normally slows output. Instead, the drop will be reflected later in the year. The same batch of figures from the ONS showed another worrying drop in car production in June, falling by 3.6 percent. This follows a 2.3 percent drop in May and signals the sharpest slowdown in nearly four years. The construction sector, one of the UK’s largest industries, also suffered a fall in June. It fell by 0.1 percent and dropped by 1.3 percent in the second quarter as a whole.

Savills shares get boost from 30pc rise in pre-tax profits

Miranda Wadham
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Savills shares get boost from 30pc rise in pre-tax profits
Estate agency group Savills (LON:SVS) saw shares rise nearly 2 percent on Thursday morning, after reporting a 27 percent rise in profits. Pre-tax profits hit £32.4 million in the first half of the year, driven by a foreign investment boom in the office market. Savills operate globally and derive two thirds of their revenue from foreign markets. Underlying profit rose to £32.4 million in the half-year, up from £25.5 million in the same period in 2016. This was driven in part by performance in its Asian markets, alongside better-than-expected results in the UK in the face of economic uncertainty. In the UK, the company said: “Increased levels of political and economic uncertainty created by the general election and the ongoing negotiations to leave the EU make it difficult to predict market volumes for the rest of the year.” Savills shares are currently trading up 1.60 percent at 924.50 (1218GMT).

Bank of England announces position designed to review staff conflicts of interest

Miranda Wadham
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Bank of England announces position designed to review staff conflicts of interest
The Bank of England has announced a new position designed to identify potential conflicts of interest among its staff, in the wake of the resignation of deputy governor Charlotte Hogg. Hogg stepped down from her post after a being reprimanded by a parliamentary committee for not declaring the fact that her brother held a position at Barclays. The recommendation for a new position to review conflicts of interests came after a review of the Bank’s practices by the Bank’s non-executive directors. BoE Governor Mark Carney said: “I welcome this review and its recommendations, which will be implemented in full.”  
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