European Markets Climb Despite UK Jobs Data Worries
European stocks, including the FTSE 100 (^FTSE), extended their gains for a second consecutive day on Tuesday, even as the UK’s latest employment figures hinted at a slowing labour market.
Investors are increasingly betting on a swifter-than-expected Bank of England interest rate cut, as the focus shifts toward supporting an economy that shows signs of needing a boost. These developments come just ahead of Chancellor Rachel Reeves’ budget announcement on 26 November, which could bring significant decisions for businesses trying to navigate uncertain times.
Danni Hewson, head of financial analysis at AJ Bell, highlighted the pressure on companies:
“A lot of blame will be placed on the chancellor’s decision at the last budget to hike national insurance for businesses whilst simultaneously upping the national living wage. That tax on jobs has undoubtedly forced some businesses to pare back their workforce or to reconsider hiring more staff, at least until the dust settles on the upcoming budget. Looking at the increase in redundancies over the three months to September tells you a great deal and partly dispels the notion that the jobs rout was stabilising, especially when you factor in falling payroll numbers.”
Despite concerns over the labour market, London’s FTSE 100 opened 1.1% higher, reaching new record levels. Vodafone (VOD.L) led the gainers after releasing its latest financial results.
Across Europe, the mood was similarly upbeat:
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Germany’s DAX (^GDAXI) rose 0.1%
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France’s CAC 40 (^FCHI) climbed 0.5%
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The pan-European STOXX 600 (^STOXX) gained 0.6%
Meanwhile, the pound dipped 0.4% against the dollar (GBP/USD), hovering just above the $1.31 mark, reflecting ongoing uncertainty in the UK economic outlook.
Investors will now be watching closely as the UK government prepares its budget, with the potential to reshape business confidence and influence market movements in the weeks ahead.
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