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Markets hit by Trump concerns ahead of UK jobs report – business live UK unemployment rate hits 42-year low but real wages shrink – business live
(35 minutes later)
9.50am BST
09:50
Britain is still creating jobs. It just isn’t paying people enough to protect them from the rising cost of living.
Today’s labour market report shows that the number of people in work in the UK increased by 122,000 in the 3 months to March 2017 to 31.95 million.
Around 200,000 full-time jobs were created, while the number of part time jobs fell by 78,000.
This drove the employment rate to a new record high of 74.8%.
9.44am BST
09:44
This chart shows how the gap between inflation (2.7% in April) and basic pay growth (2.1%in January-March) has widened, driving real wages into the red.
The gap between UK inflation (2.7% and rising) and wage growth (2.1%) is widening. Real wages falling at fastest rate in 3 years. pic.twitter.com/YmNIKe2Q4m
Including bonuses, wages rose by 2.4% year-on-year, thanks to “bonuses in the finance and insurance sector”.
9.37am BST
09:37
UK jobless rate hits 42-year low, but real wages shrink
Breaking! Britain’s unemployment rate has hit its lowest level since 1975.
The jobless rate fell to 4.6% in the January-March quarter, down from 4.7% a month ago, the Office for National Statistics reports. That’s lower than expected, and implies that the jobs market is holding up in the face of Brexit.
But there’s bad news too. Real wages are shrinking, as workers – particularly in the private sector – suffer from rising inflation.
Excluding bonuses, average weekly earnings increased by 2.1% in the quarter, that’s the weakest growth since the three months to July 2016.
That means wages are not keeping pace with inflation -- which was 2.3% in February and March, and 2.7% in April.
The ONS says:
The recent increase in consumer price inflation including owner occupiers’ housing costs has seen the annual rate of real wage growth (excluding bonuses) turn negative for the first time since the 3 months to September 2014.
Private sector regular pay grew by 2.3% in the 3 months to March 2017, while public sector pay grew by 1.3%, compared with the same period a year ago.
More to follow!
Updated
at 9.38am BST
9.26am BST
09:26
Stand by your desks! UK Unemployment, Employment and Wages data is due at 9:30 am
9.26am BST
09:26
Jobs newsflash: Furniture retailer IKEA has announced it is opening new stores in Sheffield, Exeter and Greenwich.
This will swell IKEA’s workforce by 1,300, to 11,700.
9.16am BST9.16am BST
09:1609:16
General strike hits Greece ahead of bailout voteGeneral strike hits Greece ahead of bailout vote
Over in Greece, workers have downed tools as a general strike against austerity gets underway.Over in Greece, workers have downed tools as a general strike against austerity gets underway.
Public transport is disrupted, leading to long queues in the capital. Air traffic controllers are holding a four-hour strike, while ferry workers have been on strike since Tuesday.Public transport is disrupted, leading to long queues in the capital. Air traffic controllers are holding a four-hour strike, while ferry workers have been on strike since Tuesday.
Unions are protesting against the latest round of pension cuts and tax rises agreed with lenders, in return for Greece’s next bailout loans. Greek MPs will vote on the plan tomorrow night.Unions are protesting against the latest round of pension cuts and tax rises agreed with lenders, in return for Greece’s next bailout loans. Greek MPs will vote on the plan tomorrow night.
It’s not really the weather for protesting, though, or standing in a long line hoping for a bus....
Updated
at 9.21am BST
9.08am BST9.08am BST
09:0809:08
The UK government is patting itself on the back after finally extricating itself from the Lloyds Banking Group share registry. The UK government is patting itself on the back after finally extricating itself from the Lloyds Banking Group share register.
Britain has sold its final tranche of shares in Lloyds, more than eight years after rescuing the bank during the financial crisis of 2008Britain has sold its final tranche of shares in Lloyds, more than eight years after rescuing the bank during the financial crisis of 2008
Lloyds claims that the taxpayer has made an £900m profit - a point repeated by chancellor Philip Hammond on Twitter.Lloyds claims that the taxpayer has made an £900m profit - a point repeated by chancellor Philip Hammond on Twitter.
Please to say Lloyds bailout has now been fully repaid and all taxpayers' money returned. £21.207B paid back on £20.313B injected.Please to say Lloyds bailout has now been fully repaid and all taxpayers' money returned. £21.207B paid back on £20.313B injected.
But it’s not quite as simple as that, as my colleague Jill Treanor explains:But it’s not quite as simple as that, as my colleague Jill Treanor explains:
There are a number of ways of calculating the cost of the bailout. The calculations by Lloyds do not include the £3.6bn cost of borrowing funds in the depths of the 2008 crisis, while the Office for Budget Responsibility has used other methodology to show the government will ultimately break even.There are a number of ways of calculating the cost of the bailout. The calculations by Lloyds do not include the £3.6bn cost of borrowing funds in the depths of the 2008 crisis, while the Office for Budget Responsibility has used other methodology to show the government will ultimately break even.
It also doesn’t cover inflation, of course, or the other ways in which £20bn could have been used for the public good...It also doesn’t cover inflation, of course, or the other ways in which £20bn could have been used for the public good...
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at 9.09am BST at 9.24am BST
8.58am BST8.58am BST
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Shares in cybersecurity firm Sophos have hit a new record high, up 8%, after beating City forecasts this morning.Shares in cybersecurity firm Sophos have hit a new record high, up 8%, after beating City forecasts this morning.
Sophos posted an operating profit of $38.3m after growing revenues by 10%, with “exceptionally strong” cash flow growth.Sophos posted an operating profit of $38.3m after growing revenues by 10%, with “exceptionally strong” cash flow growth.
That growth could pick up this year, after the WannaCry outbreak refocused everyone’s attention on the threat of cybercrime.That growth could pick up this year, after the WannaCry outbreak refocused everyone’s attention on the threat of cybercrime.
Sophos’s clients include the NHS, which was struck badly by last Friday’s megahack.....Sophos’s clients include the NHS, which was struck badly by last Friday’s megahack.....
Sophos waters down 'NHS is totally protected' by us boasthttps://t.co/qCTqArFhMW pic.twitter.com/e8h3jPePV3Sophos waters down 'NHS is totally protected' by us boasthttps://t.co/qCTqArFhMW pic.twitter.com/e8h3jPePV3
Updated
at 9.50am BST
8.42am BST8.42am BST
08:4208:42
The gold price has hit a two-week high this morning, as the dollar weakens and investors seek a safe haven for their money.The gold price has hit a two-week high this morning, as the dollar weakens and investors seek a safe haven for their money.
Gold is changing hands at $1.243 per ounce, the highest since May 3rd.Gold is changing hands at $1.243 per ounce, the highest since May 3rd.
8.38am BST8.38am BST
08:3808:38
Analyst: Impeachment talk hits markets.Analyst: Impeachment talk hits markets.
There’s a ‘risk off’ mood in the City today, says Naeem Aslam of Think Markets, after the New York Times reported that Donald Trump had asked James Comey to end the inquiry into Michael Flynn.There’s a ‘risk off’ mood in the City today, says Naeem Aslam of Think Markets, after the New York Times reported that Donald Trump had asked James Comey to end the inquiry into Michael Flynn.
What investors are worried about is that the impeachment could take place over in the US as the odds are showing more than 50 percent for such an event after the New York Times released its article. If such scenario does become a reality, we could literally say good bye to Trump’s reflation trade.What investors are worried about is that the impeachment could take place over in the US as the odds are showing more than 50 percent for such an event after the New York Times released its article. If such scenario does become a reality, we could literally say good bye to Trump’s reflation trade.
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at 8.47am BSTat 8.47am BST
8.27am BST8.27am BST
08:2708:27
Anxiety over the unfolding political crisis in America has his European stock markets.Anxiety over the unfolding political crisis in America has his European stock markets.
The main indices are all falling in early trading, with Britain’s FTSE 100 dropping back from yesterday’s record high.The main indices are all falling in early trading, with Britain’s FTSE 100 dropping back from yesterday’s record high.
It’s not a major selloff, but there’s certainly some jitteriness in the markets today.It’s not a major selloff, but there’s certainly some jitteriness in the markets today.
Paul Donovan of UBS explains:Paul Donovan of UBS explains:
The question for markets is “can the current administration get anything done?” if this climate persists. The importance of international investors in US markets hints at overshooting – international investors tend to understand politics less well than domestic investors. This is why market political risk was always higher in the US than in Europe.The question for markets is “can the current administration get anything done?” if this climate persists. The importance of international investors in US markets hints at overshooting – international investors tend to understand politics less well than domestic investors. This is why market political risk was always higher in the US than in Europe.
8.08am BST8.08am BST
08:0808:08
Dollar falls after Trump hit by Comey memoDollar falls after Trump hit by Comey memo
The US dollar has been hit by the latest revelations to strike Donald Trump’s White House.The US dollar has been hit by the latest revelations to strike Donald Trump’s White House.
The greenback has fallen to a six-month low against the euro, sending the single currency over $1.111 for the first time since November. It’s also hit a two-week low against the yen.The greenback has fallen to a six-month low against the euro, sending the single currency over $1.111 for the first time since November. It’s also hit a two-week low against the yen.
Euro at $1.1111Euro at $1.1111
The selloff came after it emerged that Trump had asked James Comey, then head of the FBI, to halt an investigation into Michael Flynn, Trump’s former national security advisor.The selloff came after it emerged that Trump had asked James Comey, then head of the FBI, to halt an investigation into Michael Flynn, Trump’s former national security advisor.
According to a memo written by Comey, Trump told him thatAccording to a memo written by Comey, Trump told him that
“I hope you can see your way clear to letting this go, to letting Flynn go.”“I hope you can see your way clear to letting this go, to letting Flynn go.”
Here’s the full story:Here’s the full story:
The news sent shockwaves through Washington last night, where politicians were already reeling from the news that the president had shared confidential intelligence with Russia.The news sent shockwaves through Washington last night, where politicians were already reeling from the news that the president had shared confidential intelligence with Russia.
Some Democrats are demanding a full investigation into whether Trump has interfered with the judicial process.Some Democrats are demanding a full investigation into whether Trump has interfered with the judicial process.
John McCain, the Republican senator who ran for president in 2008, said the controversies facing Trump were of “Watergate size and scale”.John McCain, the Republican senator who ran for president in 2008, said the controversies facing Trump were of “Watergate size and scale”.
The House Oversight committee has now stepped in too, requesting to see ‘any and all communications’ between Comey and Trump.The House Oversight committee has now stepped in too, requesting to see ‘any and all communications’ between Comey and Trump.
.@jasoninthehouse requests any and all communications between Former FBI Director Comey and President Trump.📄⇩ pic.twitter.com/mOBXjEHUSQ.@jasoninthehouse requests any and all communications between Former FBI Director Comey and President Trump.📄⇩ pic.twitter.com/mOBXjEHUSQ
Investors are becoming concerned that America’s political system could become engulfed by crisis, preventing lawmakers implementing tax or spending plans.Investors are becoming concerned that America’s political system could become engulfed by crisis, preventing lawmakers implementing tax or spending plans.
As Mizuho bank put it:As Mizuho bank put it:
“As reporting intensifies on Trump’s potential mishandling of classified information, and renewed speculations on the rationale of his dismissal of Comey, markets are becoming concerned whether key legislation on tax reforms could be deferred or derailed.”“As reporting intensifies on Trump’s potential mishandling of classified information, and renewed speculations on the rationale of his dismissal of Comey, markets are becoming concerned whether key legislation on tax reforms could be deferred or derailed.”
Citi have also opined....Citi have also opined....
Flutter of applause please for Citi: "James and the Giant Impeachment"Flutter of applause please for Citi: "James and the Giant Impeachment"
UpdatedUpdated
at 8.28am BSTat 8.28am BST
7.52am BST7.52am BST
07:5207:52
The agenda: UK employment reportThe agenda: UK employment report
Good morning and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.Good morning and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
The squeeze on living standards is a key issue in Britain today, after inflation hit a four-year high on Tuesday.The squeeze on living standards is a key issue in Britain today, after inflation hit a four-year high on Tuesday.
And today we get a new healthcheck on the UK labour market, which will probably confirm that pay packets are struggling to keep up with the rising cost of living.And today we get a new healthcheck on the UK labour market, which will probably confirm that pay packets are struggling to keep up with the rising cost of living.
The figures will cover the first three months of this year. Economists predict that Britain’s unemployment rate probably remained at 4.7%, the lowest rate in over 40 years, with employment at a record high.The figures will cover the first three months of this year. Economists predict that Britain’s unemployment rate probably remained at 4.7%, the lowest rate in over 40 years, with employment at a record high.
But the real story will probably be found in the wage growth figures. Basic pay is expected to have risen by around 2.2% per year in the quarter - rather less than the 2.7% inflation rate recorded in April.But the real story will probably be found in the wage growth figures. Basic pay is expected to have risen by around 2.2% per year in the quarter - rather less than the 2.7% inflation rate recorded in April.
Analysts at RBC Capital Markets say:Analysts at RBC Capital Markets say:
The March labour data are likely to show a third consecutive month with the unemployment rate at 4.7%. That would mean a very modest change in the level of employment on a 3m/3m basis after the large gain of 92k 3m/3m in January and the still impressive +39k last month.The March labour data are likely to show a third consecutive month with the unemployment rate at 4.7%. That would mean a very modest change in the level of employment on a 3m/3m basis after the large gain of 92k 3m/3m in January and the still impressive +39k last month.
Similarly on the average earnings front, there is limited scope for sharp changes in pay growth rates. Our UK economists are looking for unchanged average earnings growth of 2.3% 3m/y including bonuses and 2.2% 3m/y excluding bonuses. So with the headline figures expected to move sideways broadly speaking, one area of potential interest will be the split between full- and part-time employment. In the last couple of reports there has been a clear shift in favour of full-time work; if repeated this time, it would arguably be a sign that some of the remaining slack in the labour market is being eroded.Similarly on the average earnings front, there is limited scope for sharp changes in pay growth rates. Our UK economists are looking for unchanged average earnings growth of 2.3% 3m/y including bonuses and 2.2% 3m/y excluding bonuses. So with the headline figures expected to move sideways broadly speaking, one area of potential interest will be the split between full- and part-time employment. In the last couple of reports there has been a clear shift in favour of full-time work; if repeated this time, it would arguably be a sign that some of the remaining slack in the labour market is being eroded.
The data come out at 9.30am BST.The data come out at 9.30am BST.
Also coming up todayAlso coming up today
It’s a red letter day in the financial crisis, as the UK government finally sells its stake in Lloyds Banking Group, nearly nine years after its bailout.It’s a red letter day in the financial crisis, as the UK government finally sells its stake in Lloyds Banking Group, nearly nine years after its bailout.
Property developer British land, estate agent Foxtons, and cybersecurity firm Sophos are all reporting results.Property developer British land, estate agent Foxtons, and cybersecurity firm Sophos are all reporting results.
And a general strike is underway in Greece, as workers protest against the country’s austerity programme.And a general strike is underway in Greece, as workers protest against the country’s austerity programme.
UpdatedUpdated
at 8.56am BSTat 8.56am BST