UK shares were muted in early trade on Tuesday, as the pound and government bond yields edged up after a stronger-than-expected labour data from the region, underscoring investor concerns about a delay in interest rate cuts from the Bank of England.
The blue-chip FTSE 100 index was unchanged at 7574.58, as of 0808 GMT, while the midcap FTSE 250 shed 0.1%.
Data showed British wages excluding bonuses grew 6.2% in the last three months of 2023 from a year earlier, signalling a still-tight labour market.
The sterling edged up after the data, last up nearly 0.2%, while the yield on Britain’s benchmark 10-year gilt also gained, last standing at 4.090%, hurting equities.
Traders are now pricing in around 69 basis points (bps) of interest rate cuts from the British central bank this year, down from around 78 bps before the data.
FTSE 100 muted ahead of Bailey comments; AstraZeneca drops
Market participants will now await the release of the U.S. inflation data due later in the day, that could provide clues on the state of the world’s largest economy and help shape the outlook for interest rate cuts from the Federal Reserve.
GSK was up 0.8%, after Citigroup upgraded the drugmaker’s stock to “Buy” from “Neutral” for the first time in seven years.
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