UK stocks outperform European rivals as pay growth eases
The FTSE 100 moved 44.58 points higher, or 0.58%, to close at 7,675.21.
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Your support makes all the difference.UK stocks have outperformed European rivals as healthcare and energy giants helped keep the FTSE 100 above water.
The blue-chip index was boosted by gains for pharmaceutical firm AstraZeneca while BP and Shell saw another positive day of trading.
It moved 44.58 points higher, or 0.58%, to close at 7,675.21.
It comes as new official data showed that UK wages are outstripping inflation for the first time in nearly two years, providing some respite for households facing a cost-of-living squeeze.
Nevertheless, analysts pointed out that the pace of wage growth eased slightly from a 7.9% rise in regular earnings in the three months to July to 7.8% in the three months to August.
Wage growth is one of the key considerations for the Bank when it comes to setting interest rates as it can make inflation more persistent
This could signal good news for Bank of England policymakers who watch wage growth closely as an indicator of inflationary pressures.
Rob Morgan, chief investment analyst for Charles Stanley, said: “Wage growth is one of the key considerations for the Bank when it comes to setting interest rates as it can make inflation more persistent.
“Although the rise in pay growth is still much higher than the Bank would like, it is poised to moderate as economic conditions remain tight and the employment picture darkens.
“There are now clear signs of this with job vacancies now down by almost a quarter since peaking midway through last year.
“Alongside other factors including slowing food prices it should take some pressure off wage demands and help persuade the Bank to keep rates on hold.”
It comes ahead of September’s inflation reading on Wednesday which is expected to show another slight drop in the rate of price rises across the UK.
In other European markets, Germany’s Dax and France’s Cac 40 had a choppy day of trading and closed just about in the green, up 0.09% and 0.11% respectively.
US markets were on the front foot by the time European markets closed, with the S&P 500 up 0.2% and the Dow Jones up 0.26%.
It was a weaker day for the pound, which was down by about 0.1% against the dollar to 1.2196 and down by 0.4% against the euro to 1.1516.
In company news, shares in Rolls-Royce edged up after the engineering giant announced plans to cut up to 2,500 jobs globally in a bid to make the business more streamlined and efficient.
New boss Tufan Erginbilgic said the shake-up will help the Derby-based business to transform and build in areas that are “key to our long-term success”.
The bad news for employees who will be affected was taken as good news for investors, and its share price moved up by 1%.
Shares in Shoe Zone leapt higher after the footwear seller told investors that bumper “back to school” sales had helped drive sales more than 6% higher in the year to October compared with last.
The company said the stronger trading came despite there being 37 fewer stores than last year after closures, and as online sales surged. Its share price jumped by 8.2% at the close.
The biggest risers on the FTSE 100 were AstraZeneca, up 298p to 11,270p, JD Sports, up 2.9p to 136.75p, Taylor Wimpey, up 2.35p to 111.75p, Barratt Developments, up 8.8p to 423.9p, and Intercontinental Hotels Group, up 110p to 6,136p.
The biggest fallers on the FTSE 100 were Hargreaves Lansdown, down 17.8p to 744p, BT, down 2.6p to 117.35p, RS Group, down 11.8p to 712.2p, Prudential, down 10.4p to 888.2p, and Melrose Industries, down 5.5p to 473p.