London midday: FTSE stays up, pound drops amid expectations of March rate cut

(Sharecast News) - London stocks were still in the black by midday on Tuesday, while sterling fell as the latest jobs data boosted expectations of a rate cut in March.

The FTSE 100 was up 0.3% at 10,507.85, while the pound was 0.4% lower against the dollar at 1.3578.

Figures released earlier by the Office for National Statistics showed the unemployment rate hit its highest level in nearly five years in December, while earnings growth eased.

The jobless rate nudged up to 5.2% in the three months to December from 5.1% in the previous three months, hitting the highest level since the first quarter of 2021. Economists were expecting the rate to be unchanged.

Basic pay excluding bonuses rose by 4.2% in the quarter, down from 4.4%. Total earnings including bonuses grew 4.2%, down from 4.6% in September to November.

The data also showed that payrolled employees fell by 121,000 between December 2024 and December 2025, and by 6,000 between November 2025 and December 2025. The early estimate of payrolled employees for January 2026 showed a 134,000 decline on the year, and an 11,000 drop on the month, to 30.3 million.

ONS director of economic statistics Liz McKeown said: "The number of workers on payroll fell further in the final quarter of the year, reflecting weak hiring activity, although it is largely unchanged in the latest month. Over the same period the unemployment rate increased, with data showing that more people who were out of work are now actively looking for a job.

"The number of vacancies has remained broadly stable since the middle of last year. Alongside rising unemployment this means that the number of unemployed people per vacancy has increased, reaching a new post-pandemic high. Meanwhile, redundancies are also showing an upward trend.

"Private sector wage growth continues to slow and is at its lowest rate in five years. Public sector pay growth also slowed in the latest period but remains elevated, still affected by some pay awards being implemented earlier in 2025 than 2024, although this effect has now started to diminish."

Emma Wall, chief investment strategist at Hargreaves Lansdown, said: "We agree with the market that this weakness in data confirms expectations that the Bank of England Monetary Policy Committee will cut rates next month - remember that split vote last time around - but we don't think it's bad enough to tilt the Committee to abandon its slow and steady approach.

"Two cuts through the year is still our base case, given where inflation is and the current trajectory. That said, if jobs data continues to weaken, and is coupled with stagnant or non-existent economic growth, we could see a ramping up of cuts in the second half."

In equity markets, rate-sensitive housebuilders rose, with Barratt Redrow, Persimmon and Berkeley all up.

Stocks that were caught up in the recent selloff fuelled by worries about AI disruption were also among the gainers, with Relx, Pearson and Experian higher.

Russ Mould, investment director at AJ Bell, said: "It was almost as if investors had scouted for the most affected names and bought everything on the list.

"Millions of pounds have been wiped off these names this year thanks to the launch of rival AI services. Investors initially panicked but might now be taking the view that too much bad news is now in the price and these names could have what it takes to fight off AI disruption."

Mining giant BHP gained as it reported a sharp jump in first-half earnings and lifted its dividend by 46% as its pivot towards copper production from iron ore paid off.

Raspberry Pi rocketed to the top of the FTSE 250, with traders pointing to X, where one account holder posted a "fun trade idea" to go long the shares, citing AI assistants OpenClaw and PicoClaw, Nanobot and hoarding.

Applied Nutrition surged as it said first-half EBITDA was ahead of management expectations, while revenue shot up 57% to �74.5m.

SSP was boosted by an upgrade to 'buy' from 'neutral' at UBS.

On the downside, copper miner Antofagasta slumped despite reporting strong full-year topline growth and delivering record underlying earnings, driven by increased commodity prices and higher sales volumes.

Miners in general were weaker as copper prices fell, with Anglo American, Glencore and Rio Tinto also down.

InterContinental Hotels reversed earlier gains despite reporting a rise in full-year operating profit and revenue, hiking its dividend and announcing a new $950m share buyback, amid strength in the EMEEA region.

Plus500 tumbled after the company's chief executive, chief financial officer and chief marketing officer sold 1.5m shares to Goldman Sachs.

Market Movers

FTSE 100 (UKX) 10,507.85 0.33%

FTSE 250 (MCX) 23,345.37 -0.13%

techMARK (TASX) 6,071.97 0.24%

FTSE 100 - Risers

Barratt Redrow (BTRW) 385.80p 3.18%

Airtel Africa (AAF) 344.20p 2.38%

Relx plc (REL) 2,219.00p 2.07%

GSK (GSK) 2,226.00p 1.92%

Persimmon (PSN) 1,531.50p 1.79%

Compass Group (CPG) 2,088.00p 1.70%

Pearson (PSON) 918.60p 1.62%

Legal & General Group (LGEN) 273.80p 1.56%

Centrica (CNA) 196.35p 1.47%

Land Securities Group (LAND) 660.00p 1.46%

FTSE 100 - Fallers

Antofagasta (ANTO) 3,591.00p -4.14%

Weir Group (WEIR) 3,400.00p -3.13%

InterContinental Hotels Group (IHG) 140.40p -2.84%

Anglo American (AAL) 3,482.00p -2.68%

Fresnillo (FRES) 3,714.00p -2.62%

Glencore (GLEN) 481.90p -2.23%

Melrose Industries (MRO) 653.20p -2.07%

Babcock International Group (BAB) 1,319.00p -2.01%

Rolls-Royce Holdings (RR.) 1,274.00p -1.85%

Flutter Entertainment (DI) (FLTR) 9,188.00p -1.63%

FTSE 250 - Risers

Raspberry PI Holdings (RPI) 387.30p 26.98%

Applied Nutrition (APN) 257.75p 6.73%

SSP Group (SSPG) 202.20p 6.70%

Sirius Real Estate Ltd. (SRE) 104.50p 3.47%

Taylor Wimpey (TW.) 115.95p 1.93%

3i Infrastructure (3IN) 353.50p 1.87%

Ashoka India Equity Investment Trust (AIE) 255.00p 1.80%

Mony Group (MONY) 147.00p 1.73%

TR Property Inv Trust (TRY) 347.00p 1.46%

WH Smith (SMWH) 687.00p 1.33%

FTSE 250 - Fallers

Plus500 Ltd (DI) (PLUS) 4,420.00p -6.24%

Ceres Power Holdings (CWR) 295.40p -6.16%

Aston Martin Lagonda Global Holdings (AML) 58.00p -4.21%

Hochschild Mining (HOC) 676.00p -3.77%

Princes Group (PRN) 428.75p -3.43%

Pan African Resources (PAF) 144.60p -2.56%

Senior (SNR) 247.50p -2.17%

IntegraFin Holding (IHP) 329.50p -2.08%

Endeavour Mining (EDV) 4,594.00p -1.96%

Wizz Air Holdings (WIZZ) 1,381.00p -1.92%