21st Jul 2026 07:59
(Alliance News) - The FTSE 100 was called lower on Tuesday, while the pound continues to strengthen, following the release of UK unemployment, earnings and borrowing data.
Unemployment rose slightly less than expected for the latest quarter, while average earnings minus bonuses also grew less than forecast. June public sector net borrowing fell to just under GBP16 billion.
Here is what you need to know before the London market open:
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MARKETS
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FTSE 100: called down 56.6 points, 0.5% at 1,0468.16
GBP: higher at USD1.3448 (USD1.3418 at previous London equities close)
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ECONOMICS
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The UK ILO unemployment rate for people aged 16 years and over was estimated at 4.9% in the three months ended May, up from 4.7% in the previous year but down from 5.0% in the previous quarter, the Office for National Statistics reports. FXStreet-cited consensus had predicted another 5% increase. The LFS employment rate for people aged 16 to 64 years was estimated at 75.1% for the March to May quarter, up from 75.0% on-quarter but down from 75.2% year-on-year. The number of people employed in the period increased by approximately 147,000, accelerating from the previous quarter's increase of around 100,000. Average earnings excluding bonuses grew by 3.4% annually in the same quarter, unchanged from the prior quarter and in line with consensus. Including bonuses, average earnings rose 4.3%, down from 4.4% and below consensus of 4.5% growth.
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UK public sector net borrowing fell in June, although May's total was also revised downwards, the ONS reports. The UK borrowed GBP15.99 billion in June, down from GBP20.00 billion in May, which was revised downwards from GBP23.29 billion. June's total was around GBP300 million below the Office for Budget Responsibility's forecast, the ONS said, citing "lower inflation-linked debt interest costs." Borrowing for the year ended June was GBP57.6 billion or 1.9% of GDP, down GBP3.7 billion or 6.0% year-on-year. However, it was GBP2.7 billion above the OBR forecast, "partly reflecting differences in provisional public corporations data."
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Andy Burnham has announced an GBP850 million tax cut on energy bills to help ease the cost-of-living crisis in his first significant policy as UK prime minister. From October 1 energy bills will be VAT free, saving households around GBP45. The move will be funded in part by scrapping Keir Starmer's digital ID project, which had been estimated to cost around GBP600 million-a-year over three years. Funding for that scheme was due to have come from savings within existing departmental budgets, which will now be reprioritised to fund the VAT cut. The energy price cap set by Ofgem is forecast by industry analysts to be GBP1,849 for a typical household, although the resumption of military action in the US-Iran war could push prices higher because of the disruption to global oil and gas markets.
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BROKER RATINGS
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Jefferies cuts Intertek to 'hold' (buy) - price target 6,000 pence
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Exane BNP cuts Rotork to 'neutral' ('outperform') - target 503 (380) pence
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Berenberg starts Cohort with 'buy' - price target 1,630 pence
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COMPANIES - FTSE 100
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London Stock Exchange announces plans to launch London Stock Exchange 24, LSE 24, a new trading venue designed to support "near-continuous" Monday-to-Friday trading. LSEG says LSE 24 will "support the next generation of digital, algorithmic and agentic trading" by "giving global investors greater flexibility to respond to market events, access liquidity across time zones and manage risk." LSE 24 will operate separately from the Main Market, which will maintain its existing trading hours. LSEG says the venue will be available for client testing by the end of 2026, with first asset class exchange-traded products launching in the first half of 2027.
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BP says it reached an agreement to sell its mobility, convenience and electric vehicle charging businesses in Austria to Suhr, Switzerland-based volenergy AG. BP says this supports its plan to become a simpler, stronger and more valuable company and reflects its continued focus on disciplined capital allocation. The deal includes 250 BP branded retail sites, of which around 115 are company-owned and franchise-operated, as well as electric vehicle charging infrastructure and the associated fleet business. BP says: "Retail sites in Austria will continue to operate under the BP brand through a brand license agreement following completion which is expected at the end of 2026, subject to regulatory approvals." Richard Harding, interim executive vice president Downstream at BP, says: "By concentrating our capital on the assets and markets where BP can be most competitive and best serve customers, we are strengthening our balance sheet and creating a stronger downstream portfolio."
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Compass Group releases a trading update for its third quarter ended June 30, reporting 7.1% organic revenue growth and 7.2% growth in the year to date. Net new business growth accelerated into Compass' 4% to 5% target range, as expected, and "we remain on track to deliver net new growth at this level for the fifth consecutive year," it says. Compass also reports "excellent" 96% client retention, and says its pipeline of opportunities continues to support confidence in future growth. Compass also reiterates its "confidence in delivering underlying operating profit growth of above 11% in constant currency." "With an addressable market exceeding USD360 billion and significant opportunities to further increase penetration, we remain confident in delivering another year of strong earnings growth and continued margin progression," Chief Executive Dominic Blakemore comments.
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COMPANIES - FTSE 250
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Mitie Group has agreed to an up to GBP3.1 billion takeover offer from OCS. Each shareholder will be entitled to up to 221.6 pence in cash per share, comprising cash consideration of 218.5p and Mitie's final dividend of up to 3.1p for the year ended March 31. If the dividend is paid in full, the deal values Mitie at approximately GBP3.1 billion. In light of this announcement, Mitie suspends its GBP100 million share buyback programme launched in October, effective immediately. It has repurchased 49 million shares for GBP81 million in total to date. Mitie also releases a trading update for the three months ended June 30, reporting 10% revenue growth to GBP1.41 billion from GBP1.28 billion, "including 4% organic growth driven by new wins, projects growth and pricing". Contract wins and extensions or renewals rise 33% to GBP1.6 billion total from GBP1.2 billion, and Mitie boasts a "record" GBP32.5 billion bidding pipeline as of June 30, up from GBP31.7 billion.
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Frasers Group, which previously launched a EUR38.00 per share voluntary public takeover offer for Hugo Boss, says it has acquired another 2.5 million shares in or approximately 3.69% of the German fashion company. Frasers now holds 20.9 million shares in Hugo Boss, or an approximate 30.28% stake. "Frasers is therefore pleased to confirm that it has exceeded the mandatory bid threshold of 30% as provided for in the German Takeover Code," it said. Earlier this month, Hugo Boss recommended its shareholders reject the takeover approach from Frasers, which values it at EUR1.93 billion in total, calling it "inadequate from a financial point of view".
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OTHER COMPANIES
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Marston's says trading in the 42-weeks to July 18 was "strong" amid a boost from the World Cup. The Wolverhampton, England-based pub operator says England matchdays delivered on-year like-for-like sales growth of 22%, with sales up 170% on-year across Grandstand pubs. Despite this, year-to-date like-for-like sales are 1.6% lower than last year amid softer off-peak market conditions offsetting strong growth in peak occasions. Looking ahead, Marston's expects to achieve the earnings before interest, tax, depreciation and amortisation margin expansion it set out in October 2024. Chief Executive Officer Justin Platt says: "Our pubs have delivered a strong start to the summer, with an excellent World Cup once again underlining the enduring role of the community pub as the place the nation comes together to cheer the moments that matter." He adds that the firm is well-placed to resume shareholder returns in financial year 2027.
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Fuller, Smith & Turner issues a trading update ahead of its annual general meeting. The London-based pub and hotel operator says its positive trading performance has continued, with "like for like sales growth of 5.1% and good year-on-year profit conversion for the first 16 weeks of the financial year." Executive Chair Simon Emeny comments: "We have continued to trade well since the start of the new financial year – making the most of opportunities that have arisen from the combination of good weather, the World Cup and our extensive programme of summer activity in our well-invested gardens...We remain confident and optimistic about the future and our long-term success."
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By Emma Curzon, Alliance News reporter
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Intertek GroupRotorkCohortMitieFrasers GroupBPLondon Stock ExchangeCompass GroupMarstonsFuller Smith & Turner