18 October 2023 , 08:58
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UK stocks are doing better than their European counterparts, thanks to the boost from healthcare and energy giants like AstraZeneca, BP, and Shell.
The FTSE 100 index rose by 44.58 points or 0.58%, closing at 7,675.21. This comes as UK wages are beating inflation for the first time in nearly two years, offering some relief to households dealing with a cost-of-living squeeze.
However, analysts have noted that wage growth has slowed slightly, which could be good news for Bank of England policymakers who use wage growth as an indicator of inflationary pressures.
Rob Morgan, chief investment analyst for Charles Stanley, said: "Wage growth is one of the key considerations for the Bank when it comes to setting interest rates as it can make inflation more persistent." He added that there are now clear signs of this with job vacancies now down by almost a quarter since peaking midway through last year.
"Alongside other factors including slowing food prices it should take some pressure off wage demands and help persuade the Bank to keep rates on hold."
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The news comes before Wednesday's inflation reading for September, which is predicted to show a slight decrease in the rate of price increases across the UK.
In Europe, Germany's Dax and France's Cac 40 had a mixed day of trading but ended just about in the green, up 0.09% and 0.11% respectively.
US markets were doing well by the time European markets closed, with the S&P 500 up 0.2% and the Dow Jones up 0.26%.
It was a weaker day for the pound, which fell by about 0.1% against the dollar to 1.2196 and dropped by 0.4% against the euro to 1.1516.
In business news, shares in Rolls-Royce increased after the engineering giant announced plans to cut up to 2,500 jobs worldwide in an effort to make the business more streamlined and efficient.
New boss Tufan Erginbilgic said the shake-up will help the Derby-based business to transform and build in areas that are "key to our long-term success".
The bad news for employees who will be affected was taken as good news for investors, and its share price moved up by 1%.
Shares in Shoe Zone jumped higher after the footwear seller told investors that strong "back to school" sales had helped drive sales more than 6% higher in the year to October compared with last.
The company revealed that despite having 37 fewer stores than last year due to closures, and a surge in online sales, trading remained strong. This news saw its share price leap by 8.2% at the close of trading.
The top performers on the FTSE 100 were AstraZeneca, which rose by 298p to 11,270p, JD Sports, which increased by 2.9p to 136.75p, Taylor Wimpey, which climbed by 2.35p to 111.75p, Barratt Developments, which jumped by 8.8p to 423.9p, and Intercontinental Hotels Group, which soared by 110p to 6,136p.
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On the other hand, the biggest losers on the FTSE 100 were Hargreaves Lansdown, which fell by 17.8p to 744p, BT, which dropped by 2.6p to 117.35p, RS Group, which declined by 11.8p to 712.2p, Prudential, which slipped by 10.4p to 888.2p, and Melrose Industries, which decreased by 5.5p to 473p.
* An AI tool was used to add an extra layer to the editing process for this story. You can report any errors to [email protected]