FTSE 100: London down on easing wage growth as Ocado and Qinetiq make strides

London’s FTSE 100 slipped on Tuesday following fresh figures which showed easing wage growth in the UK economy, giving a shot in the arm to the Bank of England.

The capital’s premier bluechip index closed 0.48 per cent lower at 7,558.34 while the FTSE 250, which is more aligned with the health of the UK economy, edged into the green at 19,213.02, up 0.06 per cent.

Markets were driven by news that wage growth had cooled significantly in the three months to November, making it more likely that the Bank of England will pivot to cutting interest rates in the near future.

According to the Office for National Statistics, annual wage growth including bonuses averaged 6.5 per cent between September and November, down from last month’s figure of 7.2 per cent and below the 6.8 per cent expected by economists.

“While annual pay growth remains high in cash terms, we continue to see signs that wage pressures might be easing overall,” ONS director of economic statistics Liz McKeown said.

“UK wages grew at their slowest pace in almost a year, extending the view that inflationary pressures are easing,” said Russ Mould, investment director at AJ Bell.

“Data points like these don’t seem enough to put central banks on a different path and we’re facing the risk that the likes of the Bank of England and European Central Bank will act too late to avoid a sharp economic slowdown,” Mould continued.

With wage growth slowing, the pound dropped around 0.5 per cent to trade at $1.267 as markets bet that rate cuts were incoming.

Further Houthi strikes in the Red Sea also caused investor unease. Reports suggested that Shell was halting shipments through the volatile watercourse this afternoon, following the example of Hapag Lloyd and Maersk.

Despite the concerns, oil prices were actually trading lower.

Market updates

The FTSE 100’s biggest riser was Experian, which closed 2.3 per cent higher after it said activity in its UK, Ireland and Latin America regions helped deliver strong revenue growth in its third quarter. It has slightly lifted the lower end of its full-year forecast.

British defence giant Qinetiq’s share price jumped 4.8 per cent after it announced a £100m share buyback programme following an “excellent” order performance last year.

The embattled FTSE 250-listed company has been looking to turn around its fortunes as rivals such as Lockheed Martin and BAE Systems have seen their share prices and order books benefit from global conflicts in Ukraine and the Middle East.

Grocery technology giant Ocado, which is jointly-run by Marks and Spencer, said it would return to positive earnings for the full year, as customers fell back in favour with the brand. Shares edged up 0.7 per cent.

The firm said it was boosted by its highest level of sales over Christmas, selling over 90 per cent  of peak slots released by mid-October.

Meanwhile, telecoms giant Vodafone signed a decade-long partnership deal with Microsoft on Tuesday as it ramped up investment in its digital services amid a dramatic turnaround effort. Its shares slightly increased after the open.

Rightmove also fell nearly four per cent after a rating downgrade from JP Morgan.

FTSE 100 risers and fallers

Risers

1 – Experian, up 2.3 per cent

2 – Hikma Pharmaceuticals, up 1.9 per cent

3 – Compass Group, up 1.4 per cent

4 – Next, up 1 per cent

5 – Burberry, up 1 per cent

Fallers

1 – JD Sports, down 5.3 per cent

2 – Fresnillo, down 4.6 per cent

3 – Rightmove, down 3.9 per cent

4 – Standard Chartered, down 2.6 per cent

5 – Barclays , down 2.5 per cent

Market prices

Brent oil – $77.38 a barrel, down 0.23 per cent

Gold – $2,033.55 per ounce, down 0.94 per cent

GBP/USD – $1.27, down 0.42 per cent