FTSE 100 stalled by Vodafone’s outlook cut, weak employment data

The FTSE 100 slipped from two-month peaks, as Vodafone’s disappointing outlook on Tuesday added to the gloom of weaker-than-expected employment data.

The blue-chip index was down 0.1% by 0823 GMT after hitting a two-month peak last week. Vodafone tumbled 4.8% after the mobile phone operator cut its full-year free cash flow forecast, reflecting a worsening global macroeconomic climate and higher energy costs.

Data earlier showed Britain’s unemployment rate unexpectedly rose and vacancies fell for the fifth report in a row as employers worried about the outlook for the economy ahead of a tough government budget plan later this week.

However, the pound rallied against a weakening dollar amid growing expectations that the US Federal Reserve will slow its pace of interest rate hikes.

FTSE 100 slips

The domestically focused FTSE 250 midcap index also slipped 0.1%, with Ninety One dropping 5.9% after the investment manager said its half-year assets under management fell by 8%.

BAE Systems jumped 2.9% after Prime Minister Rishi Sunak awarded a 4.2 billion pound ($4.94 billion) contract to build five ships for the Royal Navy.