Slower Wage Growth Helps Ftse 100 Climb To Nine-Month High

The FTSE 100 closed at its highest level since May last year after official data showed a slowdown in wage growth.

The Office for National Statistics (ONS) said on Tuesday morning that average regular pay growth, excluding bonuses, fell to 6.1% in the quarter to January, down from 6.2% in the three months to December and marking the slowest growth for more than a year.

Traders took the data as a sign interest rates might need to be cut earlier than previously expected, boosting UK equities and knocking the pound in the process.

London’s top index closed 78.58 points, or 1.02%, higher to end the day at 7,747.81 as a result.

The pound was down 0.33% at 1.277 US dollars and was 0.19% lower at 1.170 euros at market close in London.

Chris Beauchamp, chief market analyst at IG, said: “Signs that UK wage growth is easing, along with rising unemployment, combined with a higher dollar to drive the pound against the dollar back from a sevenmonth high today.

Across the Channel, hopes about lower borrowing rates also helped spark increases for Europe’s other major markets.

The German Dax index was up 1.23% at the close and the Cac 40 in France closed up 0.84%.

Pets at Home, which runs vet facilities as well as pet stores, saw its shares drop by 9.8p to 265.4p.

It said it was disappointed by the CMA’s findings because it does not think it reflects its business model based on locally owned vet practices.

Housebuilder Persimmon closed in the red after it revealed annual profits more than halved and warned 2024 will be another difficult year.