Business Update: Record High Wage Growth Hits UK Market
15 August 2023
The FTSE 100 ended the day with a decrease of 117.51 points at 7389.64. New data from the Office for National Statistics reveals that UK wages, excluding bonuses, grew at a remarkable rate of 7.8% in the second quarter of this year, the highest in history. This surge in wage growth demonstrates workers’ efforts to negotiate better salaries in order to combat the pressures of rising living costs. However, while wage growth is promising, it still lags behind inflation, leading to a decline in purchasing power for Britons.
In other news, retail sales in the US experienced a significant boost in July, with a 0.7% increase. This rise was primarily driven by online purchases and increased spending in clothing stores, grocery stores, bars, and restaurants. The resilience of consumer spending continues to play a crucial role in powering the US economy.
In the stock market, the FTSE 100 closed 1.65% lower at 7,383.25, while the FTSE 250 ended the day at 0.48% lower at 18,671.53. Legal & General Group outperformed expectations with its first-half earnings, with operating profits reaching £941 million. The surge in annuity sales played a significant role in this outcome.
Furthermore, there has been a significant rise in US tourists spending their money in other European cities instead of London due to the tourist tax implemented by Rishi Sunak.
Looking ahead, experts predict that the state pension in the UK could increase by 8.2% to nearly £11,500 per year if earnings growth remains steady, providing relief for older adults facing rising household expenses. Oil prices experienced a slight dip as a result of sluggish economic figures from China, despite Beijing unexpectedly cutting key policy rates. The dip in prices comes after a period of sustained rally due to supply cuts by Saudi Arabia and Russia.
In other market news, ITV has announced its first-ever investment in a consumer healthcare brand, Flarin, through a ‘media for equity deal.’ This strategic investment will allow Flarin to advertise on ITV channels, capitalizing on the innovative and patented lipid technology of its pain relief products.
The Financial Conduct Authority is launching an inquiry into debanking experiences, specifically targeting politically exposed persons (PEPs), which includes Members of Parliament. The regulator aims to understand the application of rules surrounding PEPs and whether they require updating.
Lastly, the billionaire brothers behind B&M are reportedly considering the acquisition of Wilko, as they aim to dominate the discount market. Other contenders for the struggling chain include Poundland, Home Bargains, and The Range.
Stay tuned for more updates and insights in the world of business.
Source: Business Live
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