On Tuesday, shares listed in London experienced a decline, closing downcast with the FTSE 100 index falling by 0.78%. This movement followed the latest updates regarding the labor market in the United Kingdom. According to data released by the Office for National Statistics, the country's unemployment rate remained in line with expectations at 4.1% for the three months leading to July, slightly improved from 4.2% in the previous three-month period.
In addition, the employment rate stood at 74.8%. Financial experts have analyzed these figures and drawn significant conclusions. "The stronger employment and drop in unemployment confirms the need for a cautious and slow easing cycle from the Bank of England (BoE). We expect one more cut in November this year, followed by four cuts in 2025 and two in 2026," commented analysts from Bank of America Global Research.
They highlighted that concerns regarding inflation persistence are currently expected to overshadow issues related to growth and the labor market in the UK. The data indicates potential risks that the labor market could tighten again as growth accelerates, which may hinder easing dynamics in wage growth.
Looking ahead, the Bank of England's Monetary Policy Committee is scheduled to convene next week. Currently, market watchers anticipate that the committee will maintain the existing interest rates. In the United States, the political landscape is heating up as presidential aspirants, including current Vice President Kamala Harris and former President Donald Trump, are set to engage in a televised debate this evening.
Research from Deutsche Bank has indicated that discussions surrounding the elections have taken a backseat as the US Federal Reserve prepares for its forthcoming monetary policy decision. Analysts predict that electoral matters will regain prominence following the Fed's rate decision in September. Focusing on the corporate sector, AstraZeneca, the British-Swedish biopharmaceutical giant, faced the largest decline among London-listed blue-chip companies, sinking 2.41% by the closing bell.
This drop came after the company reported that its datopotamab deruxtecan lung cancer treatment, developed in collaboration with the Japanese pharmaceutical firm Daiichi Sankyo, did not yield a significant improvement in overall survival rates for patients involved in the phase 3 Tropion-Lung01 trial.
Despite the setback, AstraZeneca has noted that datopotamab deruxtecan, when combined with Imfinzi and chemotherapy, exhibited promising response rates in patients suffering from non-small cell lung cancer, based on the outcomes of the NeoCoast-2 phase 2 platform trial. In conclusion, as the UK’s labor market data plays a crucial role in deciphering monetary policy direction, coupled with the evolving corporate news landscape, investors remain vigilant and attentive to future developments..