Closing summary
Wall Street has opened flat to slightly higher after stronger-than-expected US jobs data. The Dow Jones was little changed while the Nasdaq edged 0.2% higher and the S&P 500 rose 0.3%.
Over here, the FTSE 100 index is 0.4% lower while the German and French markets are down 0.3% and 0.6% respectively.
The US workforce added 216,000 jobs last month, more than expected by economists, capping another robust year of growth in the face of higher interest rates.
Policymakers, weighing when to start cutting borrowing costs, are closely monitoring the strength of the labor market as they try to guide the world’s largest economy to a so-called “soft landing”, where price growth normalizes and recession is avoided.
American employers had been expected by economists to add about 164,000 jobs in December. Recruitment across the public, healthcare, social assistance and construction sectors helped drive growth as 2023 drew to a close.
However, the increases in US jobs in October and November were revised lower by a combined 71,000.
Inflation across the eurozone rose in December after an increase in energy costs, reversing six months of consecutive falls and easing the pressure on the European Central Bank (ECB) to cut interest rates.
Figures from the EU statistical agency Eurostat showed consumer prices across the 20-country bloc rose at an annual rate of 2.9% last month, up from 2.4% in November. Economists polled by Reuters had forecast a slightly higher reading of 3% for December.
The increase in the headline rate comes after the end of government support for utility costs, alongside a smaller annual decline in energy prices in December than in November connected to last year’s one-off subsidy in Germany.
Thank you for reading the blog. Have a great weekend! We’ll be back next week. – JK
Davies: 'did not intend to underplay serious challenges' for first-time buyers
NatWest Group chairman Sir Howard Davies has released a sort of mea culpa, a statement to clarify his earlier remarks that it’s not “that difficult” to buy a home and people just have to save for it.
He said he “did not intend to underplay the serious challenges” people face buying homes. The interview on radio 4’s Today programme this morning provoked outrage, including from campaign group Generation Rent. Critics said his claims showed he was out of touch with the reality faced by many people trying to buy a home.
Clarifying his remarks, Davies said:
Given recent rate movements by lenders there are some early green shoots in mortgage pricing and while funding remains strong, my comment was meant to reflect that in this context access to mortgages is less difficult than it has been.
I fully realise it did not come across in that way for listeners and as I said on the programme, I do recognise how difficult it is for people buying a home and I did not intend to underplay the serious challenges they face.
People have to save much more than they did in the past and that is tough for first-time buyers.
The role for banks in today’s environment is to lend responsibly and support customers to build a savings habit and move towards home ownership.
Torsten Bell, who runs the Resolution Foundation think tank, said the time required to save for a typical first-time buyer deposit has spiralled in recent years.
