Thanks for joining me. Unemployment hit its highest level in four years, official figures show, in a sign that Britain’s jobs market continues to deteriorate.
The rate of people out of work rose to 5.1pc in the three months to October, the Office for National Statistics (ONS) said, which was the highest since January 2021.
In a further sign of a downturn in the jobs market, pay growth fell to its lowest level in three years as businesses grappled with uncertainty ahead of Rachel Reeves’s Budget.
Regular pay excluding bonuses dropped to 4.6pc over the period, down from an upwardly revised 4.7pc and its weakest since the three months to April 2022.
The signs of weakness in the labour market comes as the Bank of England prepares to announce its next interest rate decision on Thursday.
Traders are betting that policymakers will lower borrowing costs for the first time since August. Here is what you need to know.
5 things to start your day
1) Benefits crisis ‘getting worse’, warns Labour’s worklessness tsar | Alan Milburn, the former health secretary, said there was “a whole systems failure” in Britain’s welfare state as the number of young people not in employment, education or training – or Neet – edges closer to one million
2) Treasury warns public sector over smaller pay rises | The Treasury said on Monday that the precarious state of public finances meant nurses, doctors, teachers and civil servants should prepare for subdued wage increases next year
3) Business eases opposition to union-boosting laws after Labour climbdown | Six leading lobby groups, including the Confederation of British Industry (CBI), have urged the Government to pass the workers’ rights bill as soon as possible to end months of wrangling over unfair dismissal protections
4) World ‘blind’ to risks in booming $250tn shadow bank market | The Financial Stability Board (FSB), a network of global watchdogs, said “severe limitations” on the availability of data from the $250tn (£190tn) industry made it more difficult to spot the seeds of another global financial crash
5) Labour leadership coup ‘risks triggering market chaos’ | Investment bank Panmure Liberum warned that replacing the Prime Minister with a Left-leaning successor could have “loud echoes” of Liz Truss’s mini-Budget crisis
What happened overnight
Shares tumbled in Asia ahead of the release of US employment figures that could drive the direction of interest rates.
Tokyo’s Nikkei 225 declined 1.2pc to 49,544.21 as preliminary factory data showed manufacturing slowing slightly. The S&P Global Flash purchasing managers index rose to 49.7 from 48.5 in November on a scale of up to 100 where 50 marks the cut off for expansion.
Investors are watching Japanese data carefully ahead of a Bank of Japan policy meeting on Friday that is widely expected to result in an interest rate hike that could rattle world bond and cryptocurrency markets.
Chinese markets also retreated after data for November, released Monday, came in weaker than expected. Retail sales rose at their slowest rate since 2022, during the pandemic, at 1.3pc from a year earlier in November. Lending and investment also weakened.
Hong Kong’s Hang Seng dropped 1.9pc to 25,139.16, while the Shanghai Composite index lost 1.2pc to 3,820.85.
South Korea’s Kospi gave up 1.5pc to 4,027.83, while the Taiex in Taiwan lost 1.1pc.
Australia’s S&P/ASX 200 shed 0.6pc to 8,583.00.
On Wall Street, the tech-heavy Nasdaq Composite fell 0.6pc, led by tumbles at Coinbase and Strategy after sentiment in the broader crypto market continued to wane.
The benchmark S&P 500 was down 0.2pc, while the Dow Jones Industrial Average slipped 0.1pc.
