The FTSE 100 (^FTSE) and European stocks were in risk-off mode on Tuesday, tumbling as traders raised bets that the Bank of England (BoE) will cut interest rates after official figures showed slowing wage growth and UK unemployment at a four-year high.

According to the Office for National Statistics, the UK jobless rate rose to 4.8% in June to August, its highest level since 2021. Meanwhile, regular wage growth fell to 4.7% during the three months, down from 4.8% in the previous quarter, a three-year low.

Adding to the disappointing picture, the number of payrolled employees is estimated to have fallen by 10,000 in September, and by 100,000 over the last year.

Money markets indicate there is a 38% chance of a reduction in borrowing costs by the end of 2025, compared with a 28% probability priced in on Monday.

Rob Wood, chief UK economist at Pantheon Macroeconomics, said markets “will rightly price a greater chance” of a rate cut by the end of the year, given policymakers “have placed a lot of focus on wage growth and inflation to justify another cut”.

“Slower pay growth certainly pushes us closer to forecasting a rate cut next February or as early as December if this continues. That said, we would continue to recommend caution over wages.”

The pound (GBPUSD=X) nosedived against the dollar on the back of the data, dropping more than half a cent, to trade close to a two-month low.

Chris Beauchamp, chief market analyst at IG, said: “This morning’s data provides little in the way of good news for the struggling UK economy, and puts more pressure on the Bank of England and the government to act to provide more support.

“Sterling looks at the mercy of continued US dollar strength, both from a data outlook and as short positioning in the greenback continues to unwind.”

  • London’s benchmark index (^FTSE) was 0.4% lower in early afternoon trade, with mining companies leading the fallers

  • Germany’s DAX (^GDAXI) dipped 1.2% and the CAC (^FCHI) in Paris headed 0.9% into the red

  • The pan-European STOXX 600 (^STOXX) was down 0.8%

  • Wall Street is set for a negative start as S&P 500 futures (ES=F), Dow futures (YM=F) and Nasdaq futures (NQ=F) were all in the red

  • The pound slumped 0.5% against the US dollar (GBPUSD=X) to 1.3270

Follow along for live updates throughout the day:

LIVE 14 updates

  • Silver prices hit record high

    Silver has hit a record high today as US-China trade tensions fuel safe-haven assets.

    Rising expectations of US interest rate cuts, and the on-going ‘debasement trade’, also helped to push silver to a record high of $53.60 per ounce.

    Michael Brown, senior research strategist at Pepperstone added that the precious metal is also being pushed up by “an almighty short squeeze, and physical supply crunch.”

    However, Michael Hsueh of Deutsche Bank Research said:

  • Rachel Reeves must avoid ‘Scrabble bag’ of tax rises

    Earlier this morning, the Treasury committee took evidence from top experts about the chancellor’s tax options in the upcoming budget.

    The Guardian has the details…

    Dan Neidle, founder of Tax Policy Associates, tells the committee that Reeves has two choices if she decides to raise taxes. The wise way would be to raise one of the UK’s main taxes, or perhaps expand the base of VAT, moves that could break the Labour party’s manifesto pledges.

    The less wise way, Neidle adds, is to raise the tax take “from picking from a Scrabble bag of lots of little, individual tax rises”.

    This would be suboptimal, Neidle argues, as the UK has seen plenty of minute changes, here and there, to the tax system over the last 30 years.

    He said:

    Helen Miller, director of the Institute of Fiscal Studies, also took a similar line, stating that Reeves could raise lots of additional tax revenues without breaking manifesto promises.

    Yesterday, the IFS advised the chancellor to avoid “a half-baked dash for revenue” by stitching together unrelated tax-raising measures.

  • Rising pension age hits women hardest

    New data from the Department from Work and Pensions on the working patterns of people aged 50 and above showed that our working lives are getting ever longer, as the average age of leaving work rises.

    This trend isn’t just down to people’s enthusiasm for work; it’s primarily caused by increases to the state pension age – a change that has particularly impacted the working lives of women.

    With state pension age soon to start its rise to 67, it will be interesting to see whether people will work even later in life. Enabling people to work for longer can spell good news for people’s retirement planning, giving them longer to build their pensions or vary their working patterns by going part-time.

    However, there are significant challenges, most notably healthy life expectancy.

    Not everyone is physically able to keep on working. Poor health can also strike much earlier than you think. According to the data, 44.7% of people who are classed as economically inactive between the age of 50-64 say it’s because they are sick, injured or disabled.

    The other major challenge is caring responsibilities. This can cover not just looking after your own children but also grandchildren and parents. It’s something that can take you out of the workforce at any time. It also disproportionately affects women and is a key component of the burgeoning gender pension gap. More than 18% of women said it’s a reason why they can’t look for work, compared with 7.7% of men.

    Read the full article here

  • UK grocery inflation rises to 5.2%

    UK grocery inflation rose to 5.2% in the four weeks to 5 October, adding to pressure on consumers already facing higher energy bills. Grocery sales rose 4.1% over the four week period year-on-year.

    Worldpanel by Numerator (formerly Kantar), provided an early indication of pricing pressures ahead of official UK inflation data on October 22, compared with 4.9% in last month’s report.

    Prices were rising fastest in markets such as chocolate confectionery, fresh meat and coffee and falling fastest in household paper, sugar confectionery and sparkling wine.

    Britain’s food retailers said that higher employer taxes and regulatory costs as well as increased staff wages are adding to inflationary pressure from higher prices for commodities.

    It comes as the British Retail Consortium, which represents Britain’s biggest retailers, predicts that food inflation will be up to 6% by the end of the year, putting more pressure on household budgets in the run up to Christmas.

    The Bank of England (BoE) has forecast it will hit 5.5% before Christmas and then fall back as global wholesale factors fade.

    Overall UK inflation held at 3.8% in August, according to official data published last month, the highest among major advanced economies.

    Separate industry data published on Tuesday showed British consumer spending grew by the least in four months in September as uncertainty ahead of finance minister Rachel Reeves’ budget next month and rising energy bills deterred shoppers.

  • Oil prices fall as US-China trade tensions flare up

    Oil prices fell on Tuesday morning, as the return of trade tensions between the US and China stoked concerns about how any economic impact could affect demand for fuel.

    Brent crude (BZ=F) futures slid 1.2% to $62.55 per barrel at the time of writing, while West Texas Intermediate futures (CL=F) fell by 1.3% to $58.74 a barrel.

    US Treasury secretary Scott Bessent criticised China for imposing export controls on rare earths and critical minerals, in an interview with the Financial Times published on Tuesday.

    “This is a sign of how weak their economy is, and they want to pull everybody else down with them,” he said.

    China expanded controls on rare earth exports on Thursday, to which US president Donald Trump responded by threatening to impose an additional 100% tariff on Chinese imports from 1 November.

    However, Trump then appeared to dial back his threat on Sunday, writing in a post on Truth Social: “Don’t worry about China, it will all be fine! Highly respected President Xi just had a bad moment. He doesn’t want Depression for his country, and neither do I. The U.S.A. wants to help China, not hurt it!!!”

    Trump is expected to meet with China’s president Xi Jinping in South Korea on 29 October.

    On Tuesday, the US and China began rolling out new port fees on each other’s ships, opening up another front to their trade feud.

    The flaring of trade tensions has reignited economic concerns and fears that this could weigh on demand for oil.

    Matt Britzman, senior equity analyst at Hargreaves Lansdown, said:

  • New-build transaction volumes fall by 62%

    The latest insight from Yopa has found that whilst average monthly new-build sales volumes are down 62% so far in 2025, new-build homebuyers are benefitting from improvements to market affordability.

    Mortgage lenders are currently introducing a range of new initiatives and products designed to help boost new-build affordability among the nation’s homebuyers.

    The analysis shows: –

    • Between 2023 and 2024, the average number of monthly new-build sales volumes dipped by a marginal 3.9%. However, so far this year, the same average level of monthly new-build transactions has plummeted by 62%.

    • This slowdown is evident across all regions, with Yorkshire and the Humber (-77.5%), North East (-77.3%), South West (-76.9%), North West (-70.5%), Wales (-70.5%), East Midlands (-69.0%), West Midlands (-67.5%), East of England (-65.9%), South East (-63.4%), and London (-53.9%) all recording the most significant drops.

    • Scotland has been the least affected, seeing a smaller reduction of -19.1%.

    • The average new-build house price across Britain has increased by 8.1% over the last year. As a result, new-build homes now command a premium of 30.5% versus existing properties – a premium that is up from around 25% over the last two years.

    • However, there are also a range of initiatives designed to help new-build homebuyers when it comes to securing a property, from shared ownership, the First Home scheme and Deposit Unlock.

    • In addition to the helping hand offered by these various initiatives, improvements to the mortgage market landscape have also seen lenders act to help boost new-build affordability amongst homebuyers.

  • FTSE risers and fallers

    Here are the top FTSE risers and fallers this morning:

  • China: If forced, we will fight to the end

    Well thing have certainly ramped up a bit today, with China’s Ministry of Commerce urging the US to work with Beijing.

    A spokesperson for the ministry said:

  • Bessent accuses China of trying to damage global economy

    US treasury secretary Scott Bessent has added fuel to the fire by accusing China of trying to hurt the world’s economy.

    He criticised Beijing for imposing new export controls on rare earths last week, suggesting the move would backfire.

    He told the Financial Times:

    The ongoing row threatens to overshadow the annual meetings of the World Bank Group (WBG) and the International Monetary Fund (IMF) which are taking place in Washington DC this week.

  • Pound tumbles on weak UK jobs data

    The pound slumped against the US dollar this morning after data showed a rise in UK unemployment, and a drop in numbers on company payrolls.

    Sterling fell more than half a cent against the US dollar, down 0.6% at the time of writing, to $1.3275, close to a two-month low.

    Chris Beauchamp, chief market analyst at IG, said:

  • Private sector pay growth slumps to four-year low

    The Office for National Statistics also revealed that private sector pay grew at its slowest pace in four years.

    The private sector handed employees average pay rises of 4.4% in the three months to the end of August, down from 4.7% in the period to July. It was the lowest since the three months to December 2021.

    Meanwhile, public sector pay growth climbed from 5.6% to 6%, which was the highest in more than a year.

    Liz McKeown, ONS director of economic statistics, said:

  • UK unemployment hits four year high

    The UK jobless rate rose to 4.8% in the June to August quarter, its highest level since 2021, the Office for National Statistics reported on Tuesday.

    Meanwhile wages, excluding bonuses, grew at their slowest pace in three years at 4.7%. It was the lowest since the three months to April 2022, when it was 4.5%.

    The number of employees on the payroll in the year to August was estimated to have fallen by 93,000, though it increased by 10,000 between July and August.

    Early estimates for the number of payrolled employees in September suggested a fall of 100,000 on the year and 10,000 on a monthly basis, though the ONS said this was likely to be revised when more data is received next month.

    The estimated number of job vacancies fell by 9,000 from the previous three months to 717,000 in July to September.

    Liz McKeown, director of economic statistics at the ONS, said:

    The figures come ahead of the government’s autumn budget, which chancellor Rachel Reeves is due to deliver on 26 November, with speculation ramping up as to what policy changes she could announce to raise funds to support public finances.

  • Asia and US overnight

    Stocks in Asia were lower overnight, with the Nikkei (^N225) down 2.6% on the day in Japan, while the Hang Seng (^HSI) fell 1.8% in Hong Kong — dropping for the seventh consecutive session.

    The Shanghai Composite (000001.SS) was down 0.6% by the end of the day as China imposed curbs on five US units of Hanwha Ocean after the US probed Chinese maritime, logistics and shipbuilding industries.

    In South Korea, the Kospi (^KS11) also lost 0.6% on the day despite decent results from Samsung.

    Elsewhere, the minutes from the Reserve Bank of Australia’s latest meeting revealed that the central bank remains cautious regarding future interest rate cuts due to persistent local inflation, while largely reiterating its data-dependent approach to future rate adjustments, noting that it is also awaiting the full impact of its monetary easing to be reflected in the economy.

    Across the pond, the S&P 500 (^GSPC) rose 1.6% last night bouncing back from its tariff-induced selloff on Friday, and the tech-heavy Nasdaq (^IXIC) was 2.2% higher. The Dow Jones (^DJI) gained 1.3%.

    Whilst the focus was mainly on trade yesterday, we are now two weeks into the US government shutdown, with no sign of a resolution. Prediction markets point to a growing risk of an extended shutdown, with Polymarket saying there’s a 27% chance now of it lasting beyond November 16.

    This would take it well over the 35-day record set in 2018-19 and would also continue to impact the flow of data such as jobs reports. Federal workers also remain without pay for the shutdown period.

  • Coming up

    Good morning, and welcome back to our markets live blog. As usual we will be taking a deep dive into what’s moving markets and happening across the global economy.

    To the day ahead we have data releases including UK unemployment for August, the German ZEW survey for October, and the US NFIB small business optimism index for September.

    Central bank speakers include Fed Chair Powell, the Fed’s Bowman, Waller and Collins, the ECB’s Cipollone, Makhlouf, Kocher and Villeroy, BoE Governor Bailey, and the BoE’s Taylor.

    Finally, earnings releases include JPMorgan Chase, Johnson & Johnson, Wells Fargo, Goldman Sachs, BlackRock and Citigroup

    Here’s a snapshot of what’s on the agenda:

    • 7am: Trading updates: BP, Bellway, YouGov, Bytes Technology, Ashmore, discoverIE, IntegraFin, Mitie, Oxford Instruments, Reach, Robert Walters

    • 7am: ONS labour market

    • 8am: UK grocery inflation data

    • 9am: IEA’s monthly oil market report

    • 2pm: IMF World Economic Outlook press briefing

    • 3.15pm: IMF’s Global Financial Stability Report

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