London pre-open: Stocks seen lower ahead of key data releases

14th Oct 2024 07:36

(Sharecast News) - London stocks were set to edge down at the open on Monday as investors eyed the release of key UK data points this week, including jobs figures on Tuesday and inflation readings on Wednesday.

The FTSE 100 was called to open around 10 points lower.

Kathleen Brooks, research director at XTB, said: "The data releases in the UK come thick and fast this week. On Tuesday we get labour market data. Employment data is expected to remain strong in the 3 months to August, with the UK economy expected to have created 238k jobs. The unemployment rate is expected to remain steady at 4.1%, however wage data could generate the biggest market reaction.

"Analysts expect wage growth to moderate in the three months to August. Average weekly earnings are expected to moderate to a 3.7% YoY rate, down from 4% in July. If analysts are correct, then this would be the first sub-4% reading for wage growth since 2020. It may also signal that inflation in the UK is now under control, which would support further interest rate cuts from the Bank of England.

"Wednesday's UK CPI reading will be the most important determinant of the BOE's next move, in our view. Analysts are expecting inflation growth to moderate to a 1.9% annual rate in September, down from 2.2% in August. If estimates are correct then this is a big milestone for the UK, as it would be the first reading that is below the BOE's target 2% rate since 2021, and it would also be a sign that the BOE's fight with inflation is over. If inflation does fall below 2% for September, then this is slightly below the BOE's own forecasts for inflation that were included in the August Monetary Policy Report."

In corporate news, luxury handbag maker Mulberry said it was considering its position after major shareholder Challice said it had no intention of selling its 56% stake to Mike Ashley's Frasers Group despite an increased bid for the company.

The statement came after Frasers, which already holds 37% of Mulberry, upped its offer for the rest of the firm to 150p a share from 130p late on Friday after an earlier £83m bid was rejected by the company earlier this month.

EasyJet said it was appointing the chief financial officer of European freight operator Lineas as the new head of its finance function, as current CFO Kenton Jarvis gets ready to move into the chief executive role early next year.

Jan De Raeymaeker, who prior to Lineas was the CFO of Brussels Airlines, will join the board on 20 January.

PageGroup reported a 13.5% drop in third-quarter gross profit to £201.4m, with challenging market conditions and declining confidence affecting client and candidate decision-making across all regions.

The FTSE 250 recruiter said in an update that Europe, the Middle East and Africa (EMEA) saw a 15.1% decline in gross profit, while the UK was down 13.5%, and Asia-Pacific suffered the largest drop at 16.8%, driven by a 25% fall in Greater China.

Despite the tough environment, it maintained a net cash position of £93m, with the board expecting full-year operating profit to align with market consensus of £58m.