UK service sector shrinks amid Iran war disruption and heatwave; FTSE 100 hits four-month closing high, business live
Rolling coverage of the latest economic and financial news Today’s UK Service PMI report (which polls purchasing managers from across the sector) found there was a “sustained reduction in backlogs of work across the service economy”. This was due to weak demand, S&P Global reports, adding: This contributed to another fall in employment numbers, with the pace of job losses the sharpest since February. Many service providers noted either redundancies or the non-replacement of voluntary leavers in response to reduced business requirements and pressure on margins from rising costs. Continue re
Britain’s blue-chip stock index has hit its highest level since the first week of the Iran war this morning.
The FTSE 100 climbed as high as 10,701 points this morning, up 0.4%, its highest level since 3 March.
Precious metals miner Fresnillo (+2.5%), engineering firm Weir Group (+2%), and energy company SSE (+1.8%) are the top risers.
Several factor are lifting the ‘ Footsie’ , including hopes of a US-Iran peace deal which have pushed the oil price down (and could send it lower …)
A weaker-than-expected US employment report, released yesterday, has also cheered traders by dampening expectations of rises in US interest rates.
double quotation mark “Weak jobs numbers would normally be a key reason for central banks to consider cutting rates to stimulate the economy.
The latest US jobs data confirms labour market disappointment but we’re nowhere near the stage where the Fed will reach for the monetary policy scissors to start cutting. We’re more likely to see an adjustment to the Fed’s assessment that implies no change to rates, which is still a win for markets.
Thirdly, investors are ‘rotating’ out of chip stocks (following a stellar start to the year) and into ‘old economy’ companies instead, and there are plenty of those on the London stock market.
