Closing post
Time to recap…
The US economy added 147,000 jobs in June, a sign of continuing strength in the labor market amid Donald Trump’s trade war.
The number of jobs added surpassed expectations, as economists largely anticipated a drop in openings. In another boost, the unemployment rate decreased to 4.1%, down from 4.2% in May.
Job gains were seen in state government and healthcare, which saw increases of 47,000 and 39,000 jobs, respectively. Meanwhile, federal government job losses continued, with another 7,000 roles down in May, as the Trump administration continues to cut jobs. The total job loss in the federal government has been 69,000 since January.
Economists said the data cut the chances of an early interest rate cut from the US Federal Reserve.
The dollar strengthened, while US bond prices fell, pushing up yields, and Wall Street hit a record high.
UK government bonds have rallied after Keir Starmer backed Rachel Reeves to remain as chancellor for “a very long time” despite lingering investor concerns over a multibillion-pound hole in Britain’s public finances.
The yield – in effect the interest rate – on British 10-year government bonds, also known as gilts, fell on Thursday morning to trade close to 4.5%, reversing much of the rise on Wednesday sparked by feverish speculation over Reeves’s future.
The pound rose against other leading currencies, while a closely watched business survey showed that Britain’s dominant service sector recorded its fastest rate of growth in 10 months.
But….some of the gains were later pegged back after the release of the stronger-than-anticipated US job market figures, which fuelled a rise in US government borrowing costs as investors bet the Federal Reserve may delay cutting interest rates.
The boss of Currys, the UK’s biggest electrical goods retailer, has urged the government not to increases taxes on retailers this year, saying it would damage investment and force prices to rise.
The EU and US are closing in on a high-level “framework” deal that would avert 50% tariffs on all exports from the bloc next Wednesday, Donald Trump’s self-imposed deadline.
Richard Branson’s hopes of returning Virgin trains to the west coast mainline have been dashed after the UK rail regulator rejected its application amid concerns over delays and cancelled journeys.
The boss of P&O Ferries was paid £683,000 in the financial year after the cross-Channel operator outraged the public and parliament by dismissing almost 800 mainly British workers.
UK stock market closes higher
The London stock market has closed at its highest level for two weeks, lifted by UK-focused companies.
The FTSE 100 index of blue-chip shares has ended the day 48 points higher at 8823 points. Top risers included banks NatWest (+3.2%) and Lloyds (+3.2%) and Tesco (+2.3%), while mining companies were among the fallers.
AJ Bell head of financial analysis Danni Hewson says:
“Borrowing costs, which shot up yesterday as investors priced in her potential departure from Number 11, have reversed course today, with a number of big names openly stating that they added to their gilt stash in a bet the turmoil would be short-lived.
“There has also been better news from the UK service sector as the latest PMI figures came in hotter than expected, with both businesses and consumers feeling a little more confident about spending.
“For once London’s blue-chip index was dominated by improved domestic sentiment – banks, retailers and housebuilders all made gains whilst global mining stocks slumped.
“It was a similar story on the FTSE 250. External issues pulled down companies like Watches of Switzerland which is already seeing US retailers pushing through price hikes on its products.
“The deadline for tariff talks is fast approaching and with the White House laser focused on getting that ‘big, beautiful bill’ signed into law investors might be nervous that the clock will run out before deals can be struck.
