LONDON (Alliance News) - The Conservative Party got a further economic fillip ahead of next month's General Election Friday as data showed the UK's unemployment rate fell to its lowest level since July 2008 in February, news that also gave the pound a boost.
The ILO jobless rate came in at 5.6% in the three months to February, down from 5.8% in September to November, data from the Office for National Statistics showed, meeting economists' expectations. There were 1.84 million unemployed people, down by 76,000 from the September to November period.
“With the number of people in work in Britain jumping by its biggest amount in almost a year, this will give the Bank of England more confidence about raising interest rates in the future," said Nawaz Ali, UK Market Analyst, Western Union Business Solutions.
However, the central bank is also looking at wage growth as part of its considerations on the health of the economy. ONS data showed average earnings of employees increased 1.7% including bonuses in the three months to February, below expectations for a 1.8% rise. Excluding bonuses, earnings rose 1.8% in three months to February.
The drop in jobless news is more economic fire power for the Conservatives ahead of the General Election, after International Monetary Fund chief Christine Lagarde endorsed the government's economic strategy at a panel she shared with Chancellor of the Exchequer George Osborne on Thursday.
"It's obvious what's happening in the UK has worked," she said at the meeting in Washington.
The latest news comes as the Conservatives and Labour remain almost tied in opinion polls, suggesting there will be a hung parliament after the election and a new coalition government the most likely outcome. The latest Ipsos MORI poll, its first conducted in April, has Labour leading on 35%, up a point from a month earlier. The Conservatives are on 33%, unchanged from a month ago. The daily YouGov/The Sun poll, however, showed the Tories have drawn level with Labour at 34%, having been a point behind on Thursday and two points back on Wednesday.
A separate YouGov poll for The Times found the Conservative manifesto included the most popular single policy, but found the public was overall more in favour of the policies tabled by Labour. The most popular policy was the Tory pledge to raise the personal tax-free allowance to GBP12,500, though its plan to extend the Right to Buy scheme for housing association tenants was the least popular policy announced, with 57% of respondents saying this is a bad idea.
Analysts at Societe Generale think markets are too relaxed about the potential impact on the utility companies of Labour coming out on top after the election. The bank thinks that given the potentially dramatic effect of an interventionist Labour government winning power, the election-related share price moves for SSE, National Grid and United Utilities look relatively low at 1% to 3%.
Though the prospects for a Conservative or Labour-led government remains fairly balance, the French bank says the risk of a more interventionist Labour government does not appear to have been adequately reflected in utility share prices. The bank continues to see the UK energy sector, particularly Centrica, SSE, Drax and National Grid, as particularly exposed to this ongoing political and regulatory risk.
Labour leader Ed Miliband late Thursday rebuffing overtures from Scottish National Party leader Nicola Sturgeon for the pair to unite in order to prevent the Conservatives regaining power.
In a so-called "challengers" debate, which did not include current coalition partners the Conservatives and the Liberal Democrats, Miliband was drawn into a debate with Sturgeon over the terms under which Labour would consider a coalition agreement with the SNP. Sturgeon claimed Miliband was "Tory lite" and said the SNP would work with Labour to "lock David Cameron out of Downing Street".
But Miliband rebuffed Sturgeon's move, saying Scottish independence would be a "disaster for working people" and repeated his opposition to forming a formal coalition with the Scottish nationalists. But he has still left the door open to a less formal arrangement with the SNP.
In corporate news, Rolls-Royce Holdings is one of the best-performing stocks in the FTSE 100 after it confirmed it has won its largest ever order, worth USD9.2 billion, to provide engines and support services to Emirates for 50 Airbus A380 aircraft, a deal that breaks the stranglehold that a rival engine maker had on providing engines for the airline's fleet of superjumbo aircraft.
Under the deal, the British company will provide Trent 900 engines and TotalCare service support to Emirates, with the engines to power 50 Airbus A380 aircraft due to enter service in 2016.
Emirates, the world's biggest operator of A380s, selected the General Electric and Pratt & Whitney joint venture to power its first 90 A380 jets. In November 2013, the airline said it would buy 50 more A380 double-deckers, though it held off on making an engine decision.
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Markets: UK stocks flat lined for a large proportion of the morning as both Bloomberg and Reuters experienced technical troubles that took information offline, but have since slid on news that China has allowed fund managers to start lending shares for short selling, which will bost the supply of shares. The pound rose to a four-week high against the dollar following the release of the positive jobless data.
US stock futures point to a sharply lower open on Wall Street. The DJIA is currently set to open down 0.8%, the S&P 500 down 0.7% aand the Nasdaq 100 down 1.0%.
FTSE 100: down 0.9% at 6,999.88
FTSE 250: down 0.9% at 17,574.10
AIM ALL-SHARE: down 0.2% at 748.12
GBP: up at USD1.5020
EUR: up at USD1.0817
GOLD: up at USD1,205.02 an ounce
OIL (Brent): down at USD63.71 a barrel
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Other Top Corporate News
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Anglo-Australian mining giant Rio Tinto said it has set a target for a further cost reduction of USD750 million in 2015. The company also said that with iron ore prices continuing to fall, it will continue to slash costs so as to maintain the margin between itself and high-cost producers. Speaking at the company's annual general meeting in London, Chief Executive Sam Walsh noted that compared with the 2012 base, the company has reduced its annual operating cash costs and evaluation spend by USD4.8 billion.
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The UK Competition and Markets Authority said there has been no material change in circumstances or any special reason for it reverse its ruling to force Ryanair Holdings to sell down its stake in Irish flag carrier Aer Lingus Group. Ryanair requested in February that the CMA, the UK's competition authority, re-examine its decision to require Ryanair to sell down its 29.8% stake in Aer Lingus to 5%. It argued in particular that the bid made for Aer Lingus by International Consolidated Airlines Group, the owner of British Airways constituted a material change in circumstances. The CMA said that after considering responses from Aer Lingus, IAG and the Irish government, which also holds a substantial stake in Aer Lingus, along with further submissions made by Ryanair, it has provisionally decided no material change in circumstances had taken place to force it to reverse its decision.
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International Consolidates Airlines Group has turned its back on the European airlines trade body due to a row over the threat posed by fast-expanding Gulf-based carriers, the Financial Times reported. IAG, which owns British Airways and Spanish airline Iberia, said it has pulled out of the Association of European Airlines due to a difference of opinion. Qatar Airways acquired a stake in IAG in January, becoming its biggest shareholder, and the airline has attempted to pursue a conciliatory tone with the Gulf carriers, the FT said. But other European airlines have long complained they are not on a level playing field with the state-owned Gulf carriers.
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AstraZeneca said the US Food and Drug Administration has granted orphan drug designation for its selumetinib treatment for uveal melanoma, and that the latest data from its ongoing trial of AZD9291 in non-small cell lung cancer shows a delay in disease progression.
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Outsourcer Serco Group said it has received 94.7% acceptances for its one-for-one rights issue launched last month after the group posted a huge loss on the back of massive provisions taken on onerous contracts. Serco said in March it would launch the GBP555 million rights issue in order to refinance its existing lending facilities and cut its gross debt pile by GBP450 million. The rights issue emerged after it posted a pretax loss for 2014 of GBP1.35 billion, having booked GBP1.31 billion in impairment charges and writedowns related to problem contracts.
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AIM Movers
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Applied Graphene Materials shares are up after it said it has received positive preliminary results from independent performance testing conducted on graphene-reinforced polyurethane coatings using graphene it produced. The initial results demonstrate low loading levels of its graphene nanoplatelets substantially enhance the scratch resistance and ultimate tensile strength of a polyurethane clearcoat with minimal damage to transparency or colour, it said. Zamano is another gainer after it said it is now an approved direct carrier billing partner for Three Ireland. It said the connection covers all of Three's customers including those obtained during the recent acquisition of O2. Three represents approximately 36% of the mobile market in Ireland according to latest figures, it said.
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Other Top Economics And General
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The UK unemployment rate fell to the lowest since July 2008, data from the Office for National Statistics showed. The ILO jobless rate came in at 5.6% in three months to February, down from 5.8% in September to November. The rate came in line with expectations. There were 1.84 million unemployed people, down by 76,000 from September to November period. Average earnings of employees increased 1.7% including bonuses. It was forecast to rise by 1.8%. Excluding bonuses, earnings rose 1.8% in three months to February.
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Leaders of the opposition parties clashed in a debate on Thursday night, with Labour leader Ed Miliband rebuffing overtures from Scottish National Party leader Nicola Sturgeon for the pair to unite in order to prevent the Conservatives regaining power. In the so-called "challengers" debate, which did not include coalition partners the Conservatives and the Liberal Democrats, Miliband was drawn into a debate with Sturgeon over the terms under which Labour would consider a coalition agreement with the SNP. Sturgeon claimed Miliband was "Tory lite" and said the SNP would work with Labour to "lock David Cameron out of Downing Street". But Miliband rebuffed Sturgeon's move, saying Scottish independence would be a "disaster for working people" and repeated his opposition to forming a formal coalition with the Scottish nationalists. But he has still left the door open to a less formal arrangement with the SNP.
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Labour retained its lead in the most recent Ipsos MORI poll on Friday, but the Conservatives drew level in the daily YouGov poll despite a separate survey showing people were more persuaded by Labour's manifesto policies than the Tories overall. The latest Ipsos MORI poll, its first conducted in April, has Labour leading on 35%, up a point from a month earlier. The Conservatives are on 33%, unchanged from a month ago, but the smaller parties saw a swing in support, with the UK Indepencence Party falling three points to 10% and the Green Party overtaking the Liberal Democrats, adding two points points to 8% compared with the Lib Dems, down one point to 7%.
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The International Monetary Fund ruled out allowing Greece to delay scheduled debt repayments, while the European Commission voiced dissatisfaction over talks with Athens to solve Greek financial woes. IMF chief Christine Lagarde said that a delay in Greek payments would constitute "additional financing" to Athens. A delay would be "clearly not a course of action that would...be recommendable" to the IMF's board, she said. "We have never had an advanced economy ask for payment delays," Lagarde said.
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Eurozone's consumer prices declined in March from a year ago, as estimated earlier, but prices rose from the previous month at the fastest rate in two years, latest figures from the statistical office Eurostat showed. The harmonized index of consumer prices dropped 0.1% annually after a 0.3% decline in February. That was in line with the flash estimate released by Eurostat on March 31. Prices decreased for the fourth consecutive month.
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Japan's consumer confidence improved for the fourth straight month in March, surpassing expectations, survey data from the Cabinet Office showed. The consumer confidence index rose to 41.7 in March from 40.9 in the previous month. Economists had expected the index to increase to 41.3. The latest reading was the highest since December 2013, when it marked the same 41.7.
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Russian President Vladimir Putin defended his decision to resurrect a deal to sell missiles to Iran, saying it increases security in light of the conflict in Yemen. "Under the present conditions in the region, especially regarding events in Yemen, such arms supplies are a deterrent," he said during his annual television call-in show about the deal to sell S-300 surface-to-air missiles to Iran. Saudi Arabia and eight fellow Sunni Arab countries are waging an air campaign in Yemen after advances by the mainly Shiite Houthi rebel movement forced President Abd Rabu Mansour Hadi to flee the country. The Saudis have accused Shiite Iran of aiding the Houthis. Both Tehran and the Houthis have denied the accusation.
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Afternoon Watchlist (all times in BST)
13:30 US Consumer Price Index
15:00 US CB Leading Indicator
15:00 US Reuters/Michigan Consumer Sentiment Index Preliminary
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Monday's UK Corporate Events
Evraz - Q1 Production Results
HSS Hire - Full Year Results
North Midland Construction - Full Year Results
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Monday's Key Economic Events (all times in BST)
00:01 UK Rightmove House Price Index
00:50 Japan Tertiary Industry Index
07:00 Germany Producer Price Index
n/a Germany German Buba Monthly Report
13:30 US Chicago Fed National Activity Index
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11 Jan 2016 16:21
