By Ankita Yadav
(Reuters) -London’s main stock indexes rose on Thursday, as signs of a cooling labour market assured investors that the Bank of England would likely cut interest rates by August.
The blue-chip FTSE 100 was up 0.5% as of 1001 GMT, while the domestically oriented FTSE 250 index added 0.5%.
Annual wage growth in the UK, excluding bonuses, slowed to its lowest since the second quarter of 2022 in the three months to May at 5%, data showed. The number of employees on company payrolls dropped by a provisional 41,000 in June after a 25,000 decline in May.
“For the Bank of England, this is a sign of growing slack in the labour market, which is likely to ease inflationary pressures, and mean it can cut rates sooner rather than later,” said Sarah Coles, head of personal finance at Hargreaves Lansdown.
Traders were pricing in a 77% chance of a 25 bps rate cut next month, easing slightly from 80% the day before. Overall, traders expect 2 rate cuts by the end of the year.
The data follows Wednesday’s report that showed inflation in June rose to its highest since January 2024 at 3.6%.
In company news, shares of Ocado jumped 14% as the online supermarket and technology group reported a 76.5% rise in underlying earnings in its first half and said the firm’s priority is to turn cash positive in the next financial year.
EasyJet tumbled 5% as the low-cost carrier warned that a strike by French air traffic controllers earlier this month and rising fuel costs would hit its annual profit.
Shares of technical products and service distributor Diploma jumped 6% to an all-time high after the firm upgraded its full-year organic revenue growth.
Coats Group slumped 11.4% to the bottom of the midcap index after the thread manufacturer said it would buy U.S.-based footwear insole maker OrthoLite for $770 million, including debt.
(Reporting by Ankita Yadav in Bengaluru; Editing by Shinjini Ganguli)
