The FTSE 100 is expected to edge lower at the opening bell today after fresh UK labour market data showed rising unemployment and weakening hiring conditions.
The mood has also been dampened by losses across US and Asian markets overnight, putting pressure on London stocks early in the session.
Why is the FTSE 100 expected to fall today?
The FTSE 100 index is on course to give back some of Monday’s strong gains after a mix of negative global cues and worrying UK economic signals.
On Monday, the index closed up 102.28 points at 9,751.31, outperforming European peers. However, futures suggest a drop of around 0.3% (roughly 31 points) at today’s open.
This pullback follows:
- Weak US market performance overnight
- Fresh UK unemployment data showing a further rise
- Continued signs of a cooling labour market
The FTSE 100’s record close remains 9,911, set in mid-November.
What does the latest UK unemployment data show?
Fresh figures released by the Office for National Statistics (ONS) on 16 December show that the UK unemployment rate has risen to 5.1%, up from 5.0% in the previous month.
This marks the highest level since March 2021 and was broadly in line with City expectations, offering little reassurance to markets.
The data reinforces the view that the labour market is continuing to cool as businesses remain cautious amid weak economic growth and the lingering impact of higher interest rates.
Is wage growth slowing in the UK economy?
Yes, but only slightly, and the picture is mixed between sectors.
- Average earnings (excluding bonuses) grew by 4.6% in the three months to October
- This compares with 4.7% in the previous period
- The figure came slightly above market forecasts
Private sector wage growth continued to slow, while public sector pay picked up due to delayed pay settlements.
How many jobs are being lost in the UK right now?
The ONS also reported a notable fall in payroll employment:
- 171,000 fewer payrolled employees year-on-year (-0.6%)
- 38,000 fewer jobs month-on-month (-0.1%)
- Total UK payrolled employees now stand at 30.3 million
This decline has been particularly visible among younger workers, according to official data.
What is the ONS saying about the labour market slowdown?
Liz McKeown, Director of Economic Statistics at the ONS, said the trend remains clear: “The overall picture continues to be of a weakening labour market.”
She added: “The number of employees on payroll has fallen again, reflecting subdued hiring activity, while firms told us there were fewer jobs in the latest period.”
And warned: “This weakness is also reflected in an increase in the unemployment rate… The fall in payroll numbers and increase in unemployment have been seen particularly among some younger age groups.”
What does this mean for the UK public?
For households, rising unemployment and slower wage growth may increase pressure on living standards into early 2025.
For investors, today’s FTSE 100 dip reflects caution rather than panic, but it underlines how closely UK markets are now tied to labour market health and global sentiment.
