Positive wage data and results from Royal Mail, TalkTalk and NCC Group were not sufficient to lift the pound or UK’s top share index from the Brexit blues today.
After yesterday’s retreat caused by weak Chinese economic data the FTSE 100 trod water, nearly two points softer at 7,598 as investors awaited testimony from the chairman of the Federal Reserve for an update on US interest rate policy.
The pound edged slightly higher at $1.3242 against the dollar on evidence that wage growth is probably enough to justify an interest rate rise by the Bank of England next month.
However, the data from the Office for National Statistics was lukewarm with average weekly earnings rising by 2.5% on the year in the three months to May, down from 2.6% in the previous quarter.
Meanwhile the Office for Budget Responsibility painted a gloomy picture for the government’s finances and the pressure it faces from an ageing population following the recent pledge to increase health spending.
‘The long-term outlook for the public finances is less favourable than at the time of our last [fiscal sustainability] report in January 2017,’ the budget watchdog said.
All this came as Conservative party divisions over Brexit continued to weigh on sentiment after the government's last-minute concesssions to Brexiteers yesterday were viewed as signs of the rising risk of the UK crashing out of the European Union next March without a deal.
Corporate results were on hand to lift investor spirits, however.
Royal Mail (RMG) rose 2.7% or 13p to 493.7p after reporting better-than-expected parcel growth, although its guidance on letter volumes was more cautious due to new European data privacy regulation discouraging businesses from sending out ‘spam’ mail.
TalkTalk Telecom (TALK) was a prominent riser outside the blue-chip index, up 8.7% or 9.5p to 119.4p after its revived low-cost strategy added 80,000 new broadband customers in its first quarter.
NCC Group (NCCG) was the day’s biggest riser, up 10% or 20p to 221p, after the consulting group swung to an £11.9 million full-year profit and said it had stabilised its business.