- FTSE 100 finishes 9 points ahead
- US stocks edge higher ahead of Wednesday's CPI data
- Sterling hits 15-month high after strong wages growth
4.45pm: FTSE ekes out a win
At the close, the FTSE 100 managed to recover its earlier losses to finish 0.1% higher at 7,283 points.
This comes ahead of Wednesday's US CPI data, which is expected to shed some light on the Federal Reserve's interest rate decisions.
“Equity indices continue to cautiously regain some of last week's losses ahead of Wednesday's US inflation reading and as earnings season kicks off later in the week," IG's Axel Rudolph noted.
3.40pm: Moonpig deflates slightly
Moonpig shares were easier in afternoon trading as analysts at German bank Berenberg reduced their price target for the stock to 250p from 270p, losing 1.7% at 160.90p, still well above the new target.
The analysts still maintained a 'buy' rating on the shares arguing that while they have performed well in the year-to-date, there could still be a re-rating opportunity.
"Moonpig is a market-leading business generating a 20%-plus return on invested capital; we expect it to return to double-digit earnings growth in outer years and think it has a clear path to de-leveraging rapidly," the Berenberg analysts said.
Moonpig ultimately delivered on its revised revenue guidance of £320mln for full-year 2023, the analysts noted, and profitability was "robust".
They pointed out that Moonpig shares still trade on just a 9% estimated free cash flow yield for the current year and 15 times price-to-earnings, which the analysts believe is too cheap for a business expected to return to double-digit earnings growth in future years.
3.20pm: Crude momentum
Oil prices were higher on Tuesday afternoon as supply cuts by the world's biggest oil exporters and hopes for higher demand in the developing world in the second half of 2023 outweighed the dull global economic outlook.
UK Brent crude was up 1.2% at $77,49, while US West Texas Intermediate rose 1.4% to $73.99.
Supply cuts by top exporters Saudi Arabia and Russia for August helped to lift the benchmark prices, which were also supported by the US dollar hitting a two-month low making crude cheaper for holders of other currencies which could lift oil demand.
Markets are awaiting US CPI inflation data on Wednesday to see if price pressures are continuing to moderate, which could provide clues on the Federal Reserve’s interest rate outlook.
"Oil has found a floor and the only thing ... that could break that is if US inflation is scorching hot and the Fed is forced to tighten this economy into a recession," said OANDA analyst Edward Moya.
The International Energy Agency (IEA) has maintained its expectation that oil demand from China and developing countries, combined with recently announced supply cuts, is likely to keep the market tight in the second half of the year despite a sluggish global economy, its head told Reuters on Monday.
2.45pm: Some caution
The FTSE 100 index hovered just below opening levels in midafternoon trading as US stocks started mixed on Tuesday, with investors cautious ahead of key US CPI inflation data, due tomorrow, which could show a meaningful decline.
After around 15 minutes of trading, the Dow Jones Industrial Average was up 122 points, or 0.2% at 34,066, while the S&P 500 index added 0.1%, but the Nasdaq Composite slipped back 0.1%.
Oliver Rust, head of product at independent inflation data aggregator truflation, predicts that the Bureau of Labor Statistics (BLS) will report another pronounced drop in inflation to 3.1% in June, down from 4% in May.
However, though inflation is edging ever closer to the Federal Reserve’s 2% target, the market is certain the Central Bank will hike rates again at this month’s FOMC meeting, and Rust warned that this could be a tipping point for the beleaguered economy, as elevated interest rates begin to take their toll.
2.30pm: Hiring plans increasing
UK companies were the most upbeat about their trading prospects in 10 months in June and their hiring plans increased again but rising interest rates could prompt consumers to rein in spending, according to a survey by accountants BDO, Reuters reported.
BDO said their measure of business optimism hit its highest since August 2022, helped by the survey's gauge of inflation pressure dropping to its lowest in nearly two years.
The survey's employment index posted its fifth consecutive monthly increase with rises in the number of self-employed and part-time workers, despite a slowdown in output growth with manufacturers seeing the worst output reading since May 2020.
2.15pm: Tasty partnership
Waitrose has partnered with Uber Eats in a multi-year partnership to provide customers with deliveries in “as little as 20 minutes.”
The pair have now launched in five stores across London, Waitrose’s owner John Lewis Partnership said in a statement.
Locations include Finchley Road, West Hampstead, Clerkenwell, St Katharine Docks and Greenwich, with customers having to pay a delivery charge on average of somewhere between £0 and £3.99.
Waitrose hopes to roll out the service in 200 stores across the UK by the end of August, including in Wales and Scotland.
The Uber Eats partnership builds on Waitrose’s current agreement with Deliveroo and expands the retailer’s presence with third parties.
1.30pm: A quick glance at some of today’s risers and fallers
Risers
STM - up 69% to 46.2p: The company said it reached an agreement in principle for a possible takeover which values the firm at 70p per share, a roughly 162% premium on Monday’s close. Shares, unsurprisingly, rocketed 100% to 54p.
Ondo InsurTech - up 10% to 23.5p: Shares gained 10% after the company confirmed it had reached an agreement to restructure a five-year loan note. The loan note provides additional non-dilutive financing to support the roll-out of its LeakBot system.
Intuitive Investments - up 16% to 5.8p: Shares rallied on Tuesday after the investment company revealed that it has named Sir Nigel Rudd as its next chairman. Rudd has chaired a number of listed companies over the past 25 years, such as automotive retailer Pendragon, glazing manufacturer Pilkington, pharmacy group Alliance Boots and Heathrow airport, and has also been deputy chairman of Barclays.
Empire Metals - up 10% to 2.4p: Empire Metals rose 10% as it said petrography and mineralogical work at Pitfield had possibly identified a new type of titanium deposit. House broker SP Angel said discoveries nearby backed up the possibility of a commercial prospect, though added no one is ever going down as deep as 6km, which is where 3D images suggest the anomaly starts.
Fallers
Predator Oil & Gas - down 13% to 11.8p: Shares traded down some 13% in Tuesday deals after its latest well data analysis for the MOU-4 well in Morocco. Two of four prospects seen in initial drill results have been ruled out through wireline data analysis, with one lacking “structural closure” and another “impacted by poor borehole conditions.”
1.00pm: Futures point to positive start in the US
US stocks are expected to push higher at the open on Tuesday after gains in the previous session snapped a three-session losing streak, with investors eyeing key US inflation data due later this week and the start of the Q2 corporate earnings season.
In pre-market trading, futures for the Dow Jones Industrial Average (DJIA) added 0.2%, while those for the S&P 500 and the Nasdaq-100 also both rose 0.2%.
On Monday, the DJIA gained 209.52 points, or 0.6% to close at 33,944, while the S&P 500 and the Nasdaq Composite both added 0.2%.
The June consumer price index report will be released on Wednesday, and the June producer price index is due out on Thursday, with the decline in inflation expected to have continued which should give indications to the future direction of US interest rates.
Investors have penciled in another quarter-point increase at the Federal Reserve’s July 25-26 meeting, but are undecided about what the central bank will do at its September meeting after last week’s continued robust jobs data raised concern that policymakers will revert to raising rates following the June pause.
Joshua Mahony, chief market analyst at Scope Markets commented: "Wall Street futures are pointing towards a flat open with many clearly content to sit on the sidelines ahead of those key US inflation readings which are due for publication tomorrow."
"The prints here are likely to prove instrumental in shaping the market’s view of where the Fed goes next – critically a 25 basis point hike is now close on fully priced in for the meeting at the end of July, but we’re seeing an increasingly hawkish mindset emerge for the latter part of the summer, too."
He added: "Even once the inflation prints are published, attention will quickly swing to earnings news, with reporting season now just a couple of days away. Investors will be keen to see if consumer appetite for discretionary spending is now starting to wane as living costs and the end of the post-COVID bounce back converge."
The second-quarter earnings season kicks off later this week with results from financial institutions such as JPMorgan Chase, Wells Fargo and Citigroup, plus BlackRock, PepsiCo (NASDAQ:PEP), Delta Air, and UnitedHealth.
On the economic front on Tuesday, June’s NFIB index of small business optimism rose to 91.0 from 89.4, above the consensus forecast of 89.9, indicating that credit conditions for US small businesses are holding up, for now.
12.48pm: IMF says UK has lost economic momentum
The International Monetary Fund has warned the Bank of England may need to keep interest rates high for an extended period if inflation pressures persist.
In a review of the UK economy, the IMF said the country faces a challenging economic outlook, despite being expected to avoid a recession.
The IMF thinks that the UK’s long-run prosperity hinges on “ambitious reforms”.
But it said the UK, once a “strong performer”, has now lost economic momentum.
Once a strong performer, the UK has lost economic momentum.
How can the country revive growth potential and remain a global innovation leader? https://t.co/kVR89Lt9yN pic.twitter.com/yUY984gB3d
— IMF Europe Office (@IMFinEurope) July 11, 2023
12.27pm: Revolution Beauty boss could go as part of boohoo peace deal
The chief executive of Revolution Beauty would step down as part of a compromise deal being thrashed out to resolve its ongoing spat with Boohoo, the online fashion retailer, according to Sky.
Sky said Bob Holt would relinquish his role running the company - weeks after he was ousted by Revolution shareholders at its annual meeting, before being reappointed just hours later.
The report comes after Revolution Beauty told the stock market on Monday it believes a compromise is close and could be reached in the coming days.
Holt's scalp would be one of the key elements of a peace agreement being hammered out between the beauty products retailer and Boohoo, which owns 26.6% of Revolution, Sky said.
Holt has been chief executive of Revolution for just eight months, having been parachuted into the role amid an accounting scandal which saw the company's shares suspended.
12.14pm: OECD claims jobs market on cusp of AI revolution
AI is never away from the headlines and today the OECD has had its say.
It reckons the world's wealthiest nations must urgently prepare for the impact of an imminent "AI revolution" that will change jobs, create new ones and make others disappear.
The rapid development of artificial intelligence have raised concerns that it could replace whole sectors of the workforce through automation.
But in its 2023 employment outlook, the OECD said there was little evidence of significant negative effects on employment from AI "so far".
"While the adoption of AI still remains relatively low, rapid progress, falling costs and the increasing availability of workers with AI skills indicate that OECD economies might be on the brink of an AI revolution," the report said.
AI use is generally concentrated in large firms that are still experimenting with the new technology, and many appear reluctant to replace staff, said Stefano Scarpetta, OECD director for employment, labour & social affairs.
"However, it is also clear that the potential for substitution remains significant, raising fears of decreasing wages and job losses," he wrote in an editorial.
11.43am: German business sentiment falls, sterling strength holds back FTSE
German business sentiment deteriorated more than expected in July, according to a survey released by the ZEW Center for European Economic Research in Mannheim.
The headline ZEW investor expectations index fell to -14.7 from -8.5 in June, coming in below consensus expectations for a reading of -10.5.
The current situation index edged down to -59.5 from -56.5, versus consensus expectations of -60.0.
ZEW President Achim Wambach said: "The ZEW indicator of economic sentiment is shifting even more noticeably into negative territory. Financial market experts predict a further deterioration in the economic situation by year-end.
Despite the weak survey the Dax is enjoying a strong session unlike its UK peer.
The Dax is up 56 points at 15,729 while in Paris the Cac 40 is also in the green, up 0.8%.
The strength in sterling is one of reasons for the FTSE's underperformance with many of its constituents dollar earners.
The mood is brighter in the broader FTSE 250 which is 0.7% higher at 18,138.40.
11.15am: Mortgage lenders say arrears broadly stable so far
Over in parliament, MPs on the Treasury Committee are starting to question mortgage providers on how rising interest rates are impacting consumers and the housing market.
It comes as mortgage rates hit 15 year highs with further rises in interest rates forecast as the Bank of England tries to tame inflation.
Henry Jordan from Nationwide’s says arrears are stable, with a one basis point increase in customers who are three months in arrears on their repayments.
But there has been a larger increase in people in arrears for shorter time, particularly among buy-to-let customers, he added.
Andrew Asaam at Lloyds Banking Group agreed, saying arrears are still very low in a historical context, and below pre-Covid 19 levels, although there has been a small uptick.
Skipton Building Society’s Charlotte Harrison says arrears at Skipton are flat year-on-year.
But she cautioned: “I would expect in this higher interest rate environment that we’ll see more and more financial stress than we’d have done to date.”
Bradley Fordham at Santander reported a small upturn in arrears but pointed out they are still 20% below their pre-pandemic levels, and 70% below their 2009 levels after the financial crisis.
Meanwhile, the FTSE 100 has come off earlier lows, now down 8 points at 7,266.
10.41am: Revolution Beauty and boohoo close to compromise deal
Revolution Beauty Group PLC believes a compromise with major shareholder boohoo is close and could be reached in the coming days.
The two firms have in the past few weeks been engaged in a war of words with online fast fashion retailer boohoo, which holds just under a 27% stake in Revolution, attempting to replace the company's board.
In June, Boohoo called for a general meeting to remove Bob Holt, Revolution’s chief executive, Elizabeth Lake, its chief financial officer, and Derek Zissman, the chairman, from the board, citing a lack of retail experience.
It wants Alistair McGeorge, the ex-New Look boss, and Neil Catto, the former chief finance officer of Boohoo, to lead the beauty business.
Revolution plans to hold its next general meeting on August 7, at which it will put forward the resolutions for a vote.
However, Revolution Beauty said after the market close Monday: “The board believes that a compromise position with Boohoo is close and could be reached in the coming days."
"If the board were able to reach a compromise, this would avoid the expense, administrative burden and other detrimental consequences . . . that would result from the general meeting.”
10.07am: UK jobs market weakening
While the wages data is grabbing most of the attention the other key story is that the labour market is showing signs of easing.
Samuel Tombs at Pantheon Macroeconomics pointed out the single-month unemployment rate jumped to 4.3% in May and now is in line with the MPC's estimate of its equilibrium rate:
In addition, job vacancies fell by 85,000 in the three months to June, compared to the previous three months, the largest drop since January 2009, excluding pandemic-distorted months.
As a result, the vacancies-to-unemployment ratio - the MPC’s go-to measure of labour market tightness - fell to 0.77 in May, from 0.83 in April.
Tombs estimates It will reach 2019’s average level by November, if the rate of decline since last year’s peak is maintained.
He also pointed out the payroll measure of employee numbers fell marginally (-8K m/m) in June.
“For now, wage growth still has far too much momentum, but we know it lags trends in labour market slack,” he said.
“The clear message from the slack indicators is that the MPC needn’t hike Bank Rate as aggressively as markets now are pricing in.”
9.28am: Dowlais tumbles as Citi highlights downside risks
Dowlais Group PLC (LSE:DWL) fell 6.8% to 117.24p after analysts at Citi started coverage of the company with a sell rating and 97p price target.
The broker notes consensus expects electrification to be neutral/positive for Dowlais, but its analysis suggests battery electric vehicles could be a risk in the mid-term, with around 45-50% of sales seeing margin pressure.
The bank said this was a “technical and underresearched space,” but its due-diligence includes in-depth proprietary work on the EV powertrain sub-sector and feedback from those involved in EV design and/or purchasing at car-makers.
“In a nutshell, many of the components Dowlais competes in are at risk of commoditization and/or content-loss and/or over-capacity in the BEV world amid current or upcoming tech-disruptions,” in Citi’s opinion.
Relatively high net debt and near zero financial year 2023 free cash flow also add to concerns, should the cycle turn, the broker added.
Citi also explained the stock is trading at a 20% premium versus peers.
9.10am: UK mortgage rates at 15 year highs
Expectations of higher interest rates have driven another rise in UK short-term fixed mortgage rates which have risen above the levels seen last autumn after the infamous mini-budget.
The average 2-year fixed residential mortgage rate has risen to 6.66%, Moneyfacts reports, up from 6.63% on Monday.
Confirmation from Moneyfacts this morning that we are passed the post-Truss mini-Budget peak of mortgage rates, which are now at their highest since August 2008. Full @thetimes story from yesterday/today ⬇️ pic.twitter.com/rzocyZ6JVB
— George Nixon (@George_Nixon97) July 11, 2023
That takes the cost of two-year mortgages slightly above the peak of 6.65% set last autumn, when the borrowing market was rattled by Kwasi Kwarteng’s package of unfunded tax cuts.
It’s the highest rate for two-year fixed-rate mortgages since 2008.
9.01am: Pound rises as wages data fuels talk of further rate hike
Sterling has risen following today's average earnings figures and comments from the Bank of England governor Andrew Bailey in his Mansion House speech on Monday.
The pound is trading just below US$1.2875, after earlier hitting a 15-month high, above US$1.29.
Bailey vowed that the central bank must "see the job through" to quickly bring inflation back down.
He stressed that "unacceptably high" inflation is currently his "pre-occupation"
Back to the average earnings figures, Danni Hewson at AJ Bell thinks "both the chancellor and the governor of the Bank of England will be chilled by today’s numbers which have been released just hours after both spoke of the need for pay restraint if inflation’s sticky fingers are to be prized from the UK economy."
“But as calls for wage restraint ring in our ears there are signs that the labour market is changing. Vacancy numbers have continued their steady decline and more people are looking for work."
“The UK economy has been resilient and high employment has played a huge part in fostering that resilience. But if recession is really necessary to stamp out inflation’s smouldering embers, there are signs that it is creeping closer."
“The mood music is changing and pretty soon bad news won’t be in the lining of good news, it will just be bad news," she reckons
8.46am: Strong wages data could mean another 50bp rate hike
The FTSE 100 continues its wary progress, now down 3 points, at 7,271 with economists warning today's strong average earnings figures could spark another 50 basis point rate rise by the Bank of England.
The latest UK wage data is a blow for the Bank of England in its battle against high inflation, according to ING Economics.
Private sector regular pay is now growing at more than 9% on a three-month annualised basis, the highest it has been since the depths of the Covid-19 pandemic - when the figures were highly skewed due to the furlough scheme, it pointed out.
While some of this can be explained by backward revisions, it "nevertheless bolsters the chances of a repeat 50 basis point rate hike in August," although this will depend heavily on whether next week’s services inflation comes in higher than expected too.
ING said there was a sliver of good news for policymakers, with further signs that the UK’s worker shortage crisis is becoming less acute.
“The reality though, as the Bank of England’s rate June decision made clear, is that these trends have been on display for several months now, and policymakers are losing confidence that they will translate into lower inflation,” ING said.
Nick Rees at Monex Europe agreed that a 50 basis point couldn’t be ruled out.
“Today's continued overshooting in wage growth will do little to assuage the concerns of BoE rate setters,” he said.
“A second 50bp hike on August 8th isn’t off the table, but its likelihood is now dependent on how June’s inflation data prints on July 19th,” he added.
The EY ITEM Club agreed that more rates rises were on the way.
“While a surprise rise in unemployment points to a looser jobs market, the latest pay numbers are consistent with the MPC going for another rate rise in its next meeting in August.”
“And short of clear evidence emerging that wage growth is cooling, an August rise may not be the last,” it said.
8.15am: FTSE 100 flat, rising wages keeps pressure on BoE
The FTSE 100 made cautious early progress as strong average earnings figures was seen as keeping pressure on the Bank of England to raise interest rates.
At 8.15am, London's blue-chip index was up 1.68 points at 7,275.47 while the broader FTSE 250 was more positive, up 69.15 points, or 0.4%, at 18,097.11.
In the three months to May, annual growth in average total pay, including bonuses, accelerated to 6.9% from an upwardly-revised reading of 6.7% in the previous three-month period.
Excluding bonuses, average earnings rose 7.3%, matching the upwardly revised figure for the previous month.
But there were signs the tight labour market may be creaking with the unemployment rate rising to 4.0%, up 0.2 percentage points, while the number of vacancies continued to fall.
Sarah Coles at Hargreaves Lansdown said: ““These are anti-goldilocks jobs figures, with wage rises running too hot for the Bank of England’s liking, and the market cooling off far too fast to offer any certainty over jobs.”
“It’s likely to mean both that interest rate rises are on the cards, and that more interest rate rises could well exacerbate growing weakness in the jobs market.”
But Samuel Tombs at Pantheon Macroeconomics suggested signs that the labour market is loosening will “bolster the case for the MPC to stop its rate hiking cycle soon.”
“The slowdown in hiring will reduce job-to-job flows and thus squeeze the contribution to wage growth from labour market churn, as well as ease the pressure on employers to offer existing staff large wage rises,” he thinks.
“We continue to think that the MPC will hike Bank Rate by 25bp at both of its next two meetings and then stop there,” he added.
There was better news on retail sales which rose 4.9% in June boosted by the hot weather, according to the British Retail Consortium.
Gabriella Dickens at Pantheon Macroeconomics said the figures “suggests that the official measure of retail sales volumes probably increased again in Q2, which would mark the first time it has risen for two consecutive quarters since Q3 2019.”
In company news, Centrica rose 0.5% after signing a US$8bn deal with US-based Delfin Midstream to buy 1.0mln tonnes of liquefied natural gas (LNG) a year for 15 years.
The deal will see Centrica, the owner of British Gas, take delivery of around 14 LNG cargoes per year and could provide enough energy to heat 5% of UK homes for 15 years.
Shares in Dowlais Group PLC (LSE:DWL) tumbled 3.9% to 120.15p as Citi started coverage with a ‘sell’ rating and 97p price target.
Meanwhile, STM Group’s market value nearly doubled after it said it was in talks regarding a possible 70p per share bid from PSF Capital GP II Limited.
Shares jumped 96% to 54p.
7.53am: Retail sales heat up as warm weather provides a boost
Britain’s retailers recorded a sharp rise in spending in June as hot weather prompted consumers to buy summer clothing and outdoor goods, despite growing pressure on budgets from the cost of living crisis.
The British Retail Consortium said sales increased by 4.9% in June, above the annual average growth rate, as shoppers hit the high street to buy swimwear, beach towels, outdoor games, garden furniture and barbecue food.
"The sun was shining on retailers in June, with the warm weather bringing consumers back out to the high street," said KPMG UK Head of Retail Paul Martin. "Sales of suntan lotion, food and clothing were all given a boost as consumers made the most of the record June temperatures."
Helen Dickinson, the chief executive of the BRC, said: “Sun-seekers headed to their favourite retailers to buy swimwear and beach towels, and outdoor games, garden furniture and barbecue food were boosted as families came together to celebrate Father’s Day.
“People were much more cautious about big-ticket purchases like furniture and technology equipment.”
But she warned consumer confidence remains fragile.
7.45am: Begbies Traynor (AIM:BEG) profit and revenue rise as business failures jump
The troubled times for company spells good news for Begbies Traynor (AIM:BEG).
The insolvency specialist reported solid growth in revenue and pre-tax profit and rewarded shareholders with a 9% increase in the annual dividend benefiting from a rise in business failures.
The firm said revenue in the year to April 30 rose to £121.8mln from £110.0mln while pre-tax profit jumped to £6mln from £4mln.
EPS improved to 1.9p from LPS of 0.3p before and the firm raised the total dividend to 3.8p from 3.5p the year before.
Begbies said double-digit revenue and profit growth across both operating divisions reflected increased insolvency appointments, a contribution from acquisitions in finance broking and property advisory and organic growth from property service lines.
The firm said it starts the new financial year in strong position and is confident of a further year of growth in line with market expectations.
The insolvency revenue order book is strong (up 19% in the year), driven by continued increase in insolvency market volumes.
7.30am: Centrica signs US$8bn liquefied natural gas deal
Centrica PLC (LSE:CNA) has signed an US$8bn deal with US-based Delfin Midstream to buy 1.0mln of liquefied natural gas (LNG) a year for 15 years.
The deal will see Centrica, the owner of British Gas, take delivery of around 14 LNG cargoes per year and could provide enough energy to heat 5% of UK homes for 15 years.
The FTSE 100-listed firm said the agreements marks an additional move to build further resilience in the UK's energy security.
It follows a three-year supply agreement with Equinor that will heat 4.5mln UK homes through to 2024 and the reopening of the Rough gas storage facility in October 2022.
The two parties said the LNG is expected to commence at Delfin’s Deepwater Port in 2027.
7.15am: Unemployment rises, average earnings remain inflated
Not good news for the Bank of England.
While the UK jobs market showed signs of easing in May average earnings remained inflated, according to the latest figures from the Office for National Statistics.
The unemployment rate for March to May 2023 increased by 0.2 percentage points on the quarter to 4.0%.
The increase in unemployment was driven by people unemployed for up to 12 months.
@DarrenM44 continued: (2/3)
— Office for National Statistics (ONS) (@ONS) July 11, 2023
The estimate of payrolled employees for June 2023 shows a monthly decrease, down 9,000 on the revised May 2023 figure, to 30.0mln.
Between April to June 2023, the estimated number of vacancies fell by 85,000 on the quarter to 1,034,000, the 12th consecutive fall.
Growth in average total pay (including bonuses) was 6.9% and growth in regular pay (excluding bonuses) was 7.3% in March to May 2023.
For regular pay, this equals the highest growth rate, which was also seen last month and during the coronavirus (COVID-19) pandemic period for April to June 2021.
In real terms (adjusted for inflation), growth in total and regular pay fell on the year in March to May 2023, by 1.2% for total pay and 0.8% for regular pay.
Darren Morgan at ONS said: "pay excluding bonuses has again risen at record levels in cash terms."
7.00am: FTSE expected to edge higher
Good morning. The FTSE 100 is expected to open slightly higher on Tuesday ahead of figures on average earnings and unemployment.
Spread betting companies are calling London’s blue-chip index up by around 6 points.
The index of London large-caps closed up 16.85 points, 0.2%, at 7,273.79 on Monday.
The pound was higher in early trading after hawkish comments from the Bank of England governor and chancellor.
Speaking at London's Mansion House, Bank of England governor Andrew Bailey vowed that the central bank must "see the job through" to quickly bring inflation back down.
Bailey stressed that "unacceptably high" inflation is currently his "pre-occupation"
In his address, the chancellor Jeremy Hunt unveiled plans to channel more of the nation's pension fund cash into UK companies and boost the inflation-battered economy.
On Wall Street, the Dow Jones Industrial Average rose 209.52 points, 0.6%, at 33,944.40. The S&P 500 climbed 10.58 points, 0.2%, at 4,409.53, and the Nasdaq Composite gained 24.77 points, 0.2%, at 13,685.48.
Back in London, and another early focus will be retail sales figures from the British Retail Consortium.