The FTSE 100 (^FTSE) and European stocks dipped in early trade on Tuesday, following US stocks lower even as the market prices for a Bank of England (BoE) interest rate cut following the latest job market data.

The latest update on the labour market from the Office for National Statistics (ONS) showed that unemployment rose slightly to 5.1% in the period between August and October. It also indicated that wage growth — a factor the BoE looks at in deciding interest rates — has slowed.

“The overall picture continues to be of a weakening labour market. 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,” said ONS director of economic statistics Liz McKeown.

Markets will also be looking at tomorrow’s inflation figures for clues on the health of the economy.

“Despite easing price pressures, the Bank of England is still widely tipped to deliver a sixth interest rate cut later this week as unemployment edges higher and economic growth remains lacklustre,” said Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners.

“While a rate cut just before Christmas will certainly be welcomed, as we head into 2026, businesses will be assessing budgets carefully for the New Year. With employers feeling increasingly squeezed, the economy under threat of recession and business confidence still fragile, job security remains far from guaranteed.”

  • London’s premier index fell 0.1% in early trade. BAE Systems (BA.L) and Babcock International (BAB.L) were among the top fallers in the index.

  • Germany’s DAX (^GDAXI) dipped 0.5% ahead of the latest ZEW business confidence reading.

  • The CAC 40 (^FCHI) in Paris was trading flat.

  • The pan-European STOXX 600 (^STOXX) declined 0.1%.

  • The pound traded flat against the dollar (GBPUSD=X), just below the $1.34 mark.

LIVE 9 updates

  • Stocks to watch when US markets open: Ford

    Pedro Goncalves writes:

    Ford (F) shares were the number one trending ticker on Yahoo Finance on Tuesday morning after the US carmaker said it expected to take about $19.5bn (£14.6bn) in special charges tied to a retreat from parts of its all electric vehicle strategy.

    The Detroit-based group said most of the charges would be recognised in the fourth quarter. A further $5.5bn in cash charges will be spread through 2027, with the majority paid next year.

    Ford said the charges would weigh on reported net results but would not affect adjusted earnings. On Monday the company raised its forecast for adjusted earnings before interest and taxes to about $7bn in 2025, returning to a target set earlier this year. That guidance had been cut in October to a range of $6bn to $6.5bn in adjusted EBIT.

    The charges announced on Monday include $8.5bn of write downs on electric vehicle assets and reflect changes to Ford’s longer term business plans, as it scales back investment in parts of its EV operations amid weaker than expected demand.

    The Michigan-based company said it will replace the fully electric F-150 Lightning with a new extended-range electric model that uses a gas-powered engine to recharge the battery. The company is also scrapping a next-generation electric truck, codenamed the T3, as well as planned electric commercial vans.

  • BP and Shell: Will they, won’t they?

    AJ Bell investment director Russ Mould said:

  • US suspends British tech tie-up: FT

    The US has paused a technology deal with Britain which was designed to bolster ties in artificial intelligence, quantum computing and civil nuclear energy, according to a Financial Times report on Monday.

    The deal was suspended last week, the report said, citing confirmations by UK officials. Donald Trump wanted to broker concessions in its transatlantic trade deal with Britain in areas outside of technology, the report added.

    The US has reportedly been pushing for more leniency in so-called non-tariff barriers — in areas like food and industrial goods regulations.

  • FTSE 100 top risers and fallers
  • Bigger question is rate path beyond December: PwC

    Jake Finney, senior economist at PwC UK, said:

  • UK unemployment rises and wage growth slows

    Yahoo Finance UK’s Vicky McKeever writes:

    UK unemployment rose and wage growth slowed, according to the Office for National Statistics (ONS), in further signs of weakness in the jobs market ahead of the Bank of England‘s (BoE) latest interest rate decision.

    The rate of UK unemployment rose to 5.1% in August to October – its highest level in nearly five years – which was in line with consensus expectations, but higher than the 5% seen in the previous three months.

    Annual growth in average earnings, excluding bonuses, was 4.6% in August to October, which was down from 4.7% for the previous three months.

    The estimated number of payrolled employees in the UK fell by 149,000 in the year to October and declined by 22,000 on the month.

    An early estimate for payrolled employees in November showed a 171,000 fall on the year and a 38,000 decline month-on-month.

    Read more on Yahoo Finance UK

  • Here’s the US stock futures chart
  • US selling sets in

    Our US team writes:

    US stock futures retreated on Tuesday, set to extend a slide as investors counted down to the delayed release of the November jobs report, seen as pivotal to the path of interest rates next year.

    Dow Jones Industrial Average futures (YM=F) fell 0.3%, while those tied to the S&P 500 (ES=F) shed 0.6%. Contracts on the tech-heavy Nasdaq (NQ=F) sank 0.9%, after the indexes kicked off the week with slight losses.

    Tech led Monday’s losses, with AI jitters continuing to bubble around big names such as Oracle (ORCL) and Broadcom (AVGO) after their underwhelming earnings results last week.

    Those worries will be put on the back burner to start Tuesday, as all eyes on Wall Street turn to the latest monthly employment figures. The late-arriving November non-farm payrolls report will fill an economic data void caused by the US government shutdown — and fuel the big year-end debate over whether the Federal Reserve will halt or hasten policy easing in 2026.

  • Good morning!

    Hello from London. Lucy Harley-McKeown here — braced to bring you the business and finance headlines of the day.

    This morning we’ve already had UK jobs data (more on that to come).

    Later this morning there will be flash PMI data for manufacturing and services for major economies. The German ZEW sentiment index will give a read on Europe’s biggest economy by GDP.

    In terms of earnings, updates come from: WH Smith (SMWH.L), Hollywood Bowl (BOWL.L), SThree (STEM.L)

    Let’s get to it.

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