(Alliance News) - The UK unemployment rate increased in August, figures showed on Tuesday, with the Office for National Statistics noting that there are still nearly 700,000 fewer people in work compared to March.
The UK unemployment rate was 4.5% for the June to August period. Consensus, according to FXStreet, had seen the jobless rate holding steady at the revised 4.3% seen for the May to July period.
Growth in average total pay - which includes bonuses - for the three months was unchanged from a year ago, while regular pay - which strips out bonuses - grew 0.8%.
For the period, the ONS said estimates show 32.6 million people over the age of 16 in work, being 102,000 fewer than a year before and 153,000 below the previous quarter.
Early numbers for September suggest there is "little change" in the number of payroll employees in the UK, the ONS said. While this is up 20,000 compared with August, the number of employees has fallen by 673,000 since March.
"Data from our Labour Force Survey show the employment rate has been decreasing since the start of the coronavirus pandemic, while the unemployment rate and the level of redundancies have been increasing in recent periods. Total hours worked, while still low, show signs of recovering and there are fewer people temporarily away from work," the ONS said.
The claimant count increased in September, reaching 2.7 million, an increase of 1.5 million since March.
Gain Capital analyst Fiona Cincotta said the rise in the claimant count was less than expected, which was "very surprising" considering the number of people coming off the UK government's furlough scheme.
"The broad expectation is still that the UK will see a sharp increase in the number of people unemployed by the end of the year, particularly as the chancellors Job Support Scheme is significantly less generous than the jobs retention scheme and given that large parts of the UK are likely to see tighter lockdown restrictions in the coming weeks," she commented.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.1% at 6,006.36
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Hang Seng: Hong Kong market closed due to typhoon.
Nikkei 225: closed up 0.2% at 23,601.78
DJIA: closed up 251.34 points, or 0.9%, at 28,838.24
S&P 500: closed up 57.09 points, or 1.6%, at 3,534.22
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GBP: down at USD1.3048 (USD1.3070)
EUR: down at USD1.1793 (USD1.1807)
Gold: down at USD1,917.19 per ounce (USD1,921.20)
Oil (Brent): up at USD42.06 a barrel (USD41.64)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Tuesday's Key Economic Events still to come
Ireland government budget
1100 CEST Germany ZEW indicator of economic sentiment
0830 EDT US consumer price index
0830 EDT US IMF World Economic Outlook published
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China's imports expanded by more than expected in September, reducing the nation's trade surplus, official data showed. China's trade balance for September came in at positive CNY257.68 billion, about USD38.19 billion, versus CNY416.59 billion last month. Exports spiked 8.7% on year before in September, the Customs Administration said. Imports, which collapsed in May but have since improved, jumped 12% – much stronger than the 1.3% contraction tipped by market analysts according to the FXStreet.
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BROKER RATING CHANGES
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BERENBERG RAISES TALK TALK TELECOM TO 'HOLD' (SELL) - PRICE TARGET 97 (67) PENCE
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CANACCORD RAISES MAN GROUP TO 'BUY' ('SELL') - TARGET 135 (129) PENCE
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BERENBERG INITIATES GREATLAND GOLD WITH 'HOLD' - TARGET 22 PENCE
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COMPANIES - FTSE 100
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SSE said it has agreed the sale of its 50% share in energy-from-waste ventures Multifuel Energy and Multifuel Energy 2 for just shy of GBP1 billion. The sale is to European Diversified Infrastructure Fund III, an infrastructure fund managed by First Sentier Investors, for a total cash consideration of GBP995 million. MEL1 and MEL2 are joint ventures between SSE and Wheelabrator Technologies, consisting of the operational Ferrybridge Multifuel 1 and Ferrybridge Multifuel 2 facilities, as well as the Skelton Grange Multifuel development project, all in west Yorkshire. "This sale marks a major step in our plans to secure at least GBP2 billion from disposals by autumn 2021, with just over GBP1.4 billion now delivered. While these multifuel assets have been successful ventures for SSE, they are non-core investments, and we are pleased to have agreed a sale that delivers significant value for shareholders while sharpening our strategic focus on our core low-carbon businesses," said Finance Director Gregor Alexander.
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COMPANIES - FTSE 250
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Sabre Insurance said its year-to-date performance has been in line with expectations, and it anticipates paying an "attractive" payout. The motor insurance provider continued to perform well throughout the pandemic and related disruption, noting that temporary lockdown-driven price reductions "fully backed out" as traffic and claim levels normalised. Gross written premiums picked up in the third quarter, Sabre said, resulting in the first nine months of the year ending 9% lower year-on-year at GBP139.2 million - having been down 14% in the first half. Sabre expects to deliver a 2020 combined ratio result "close" to its long-term mid-70%'s target. "The performance in the first nine months of the year has been in line with expectations. Policy volumes are currently better than anticipated given the rate increases implemented, with high average premiums being achieved," the company said, adding it expects to pay an "attractive" dividend for the full-year.
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COMPANIES - MAIN MARKET AND AIM
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Round Hill Music Royalty Fund confirmed plans for an initial public offering on the London Main Market, seeking to raise USD375 million to invest in the copyright interest of songwriters. The fund is managed by New York-based music publisher Round Hill, and the IPO will be led by Cenkos Securities. Once listed, Round Hill will join FTSE 250-listed Hipgnosis Songs Fund in offering investor access to music royalties. The Round Hill fund is aiming to provide total returns of 9% to 11% per annum, including a dividend yield of 4.5%.
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COMPANIES - GLOBAL
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Apple could announce as many as four new versions of the iPhone when it holds a live event on Tuesday to unveil its iPhone 12 range for the first time. The technology giant's flagship product is widely expected to include support for 5G connectivity for the first time. And reports in the US suggest the phone could be released in four different sizes, including a smaller, cheaper version called the iPhone 12 mini, alongside a model simply called the iPhone 12, and Pro and Pro Max models. The announcement comes several weeks later than is traditional after Apple admitted earlier this year that the coronavirus pandemic had impacted its launch schedule.
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Markets operator Hong Kong Exchanges & Clearing said Hong Kong's markets were closed and trading suspended for the day due to typhoon signal No. 8 being issued. The Hong Kong Observatory raised its storm signal to No. 8, the third-highest on its scale, as tropical storm Nangka threatens the city with wind speeds of up to 63 kilometers per hour, Bloomberg News reported. Under Hong Kong stock exchange rules, trading will be abandoned for the day if the signal is not lowered to 3 or below before noon. Authorities also told schools and businesses to close.
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Tuesday's Shareholder Meetings
APQ Global
Newmark Security
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By Tom Waite; thomaslwaite@alliancenews.com
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