FTSE 100 hits six-month high; UK wage growth highest since EU vote - as it happened

Finally, Britain’s stock market has ended the day at a new six-month closing high.

A risk-on mood in the markets, plus a weaker pound, helped the FTSE 100 end the day 33 points higher, at 7,469.

Other European markets also reached their highest levels since last October.

David Madden of CMC Markets says:

Fresh six month highs were achieved on the FTSE 100, DAX and CAC 40 today as the bullish sentiment continues. The fact that Brexit has been delayed, and the European Central Bank are willing to launch another round of targeted lending later this year has helped investor appetite. US-China trade talks have been moving in the right direction recently, and that has been a factor too.

That may be all for today.....

Our economics editor Larry Elliott isn’t too impressed with today’s record levels of employment.

He argues that it shows UK firms are too reluctant to invest, and would rather hire more staff (often on inadequate wages):

For decades, the critique has remained the same: a big productivity gap with rival countries is the result of low pay, inadequate training, clapped out machinery and an endemic short-termism. High levels of employment are the flipside of that.

Nomura’s chief economist, George Buckley, has spotted signs that Britain’s labour market is cooling.

Having analysed today’s unemployment report, he warns:

• Most measures of pay fell in absolute terms between January and February. Our favoured measure of pay – that of private sector regular pay excluding bonuses – declined by 0.2% m-o-m
  
• The chart below shows a swathe representing the range of 3, 4, 5 and 6m average annualised rates of private sector regular pay. The range is currently from around 2% to 3%, compared to between 4.5-5% just four months ago
  
• One school of thought is that Brexit could be negative for pay. After all, if there are risks to corporate profitability from weaker economic activity and (sterling-induced) rising input costs – the latter of which have grown at an average annual rate of some 9% since 2017 – firms are likely to try to reduce costs elsewhere to maintain margins.
  

Chinese telecoms manufacturer Huawei has hit back, hard, at claims it is a security risk and should be blacklisted by Western governments.

My colleague Rupert Neate, who is attending a conference in Shenzhen, has the story:

John Suffolk, Huawei’s chief security officer and the UK government’s former chief IT adviser, said US politicians had not produced any evidence to back up claims that Huawei’s forthcoming 5G mobile technology could be hacked by Chinese spies to eavesdrop on sensitive phone calls – or even kill targets by crashing driverless cars.

Suffolk, who was one of the highest paid British civil servants before he left for Huawei in 2011, said America’s allegations were motivated by politics and “certainly not security” concerns.

[America] can’t keep saying [Huawei] has got some dodgy technology. [Edward] Snowden revealed all kind of things going on with American technology,” he said. “No one has revealed anything that we do [is bad].

“They [the US] are belittling national security – national security is important and they shouldn’t belittle it. They should face up to the reality that technology is complicated and should work together to solve the problems that we can.”

Wall Street has opened higher, with the Dow gaining 58 points to 26,448.

The tech-focused Nasdaq has gained 0.5%, suggesting investors are upbeat today.

Larry Fink, the head of asset management giant BlackRock, has predicted that markets could be poised to “melt-up”. Why? Because investors have large cash holdings, and may fear they’re missing out on a rally.

Fink told CNBC:

Despite where the markets are in equities, we have not seen money being put to work.

We have record amounts of money in cash.”

It’s true that most indices are up over 10% this year, so investors on the sidelines may be anxious....

Here’s my colleague Richard Partington on today’s employment report:

Pay growth in Britain has risen at the fastest rate in more than a decade, as companies keep hiring despite growing fears over Brexit.

Average weekly earnings, including bonuses, rose by 3.5% on the year in the three months to February, according to the Office for National Statistics, matching the rate recorded in January and the joint highest level since mid-2008.

Basic pay increased by 3.4% on the year, down from an upwardly revised 3.5% in the three months to January.

Companies hired an additional 179,000 workers, most of them women, maintaining the UK’s record level of employment at 32.7 million. Unemployment remained at the lowest level since the mid-1970s, at 3.9%.

Britain’s jobs market has been unexpectedly resilient to the political turmoil over Brexit, despite warnings that crashing out of the EU without a deal would trigger job losses across Britain and an immediate recession.

More here...

Just in: America’s factory sector stalled in March.

US manufacturing output was unchanged last month, new figures from the Federal Reserve show, a little weaker than the 0.1% rise expected.

Industrial output (a wider measure that also includes energy production) fell by 0.1%, rather than rising 0.2% as expected.

Car assembly rates dropped too, from 11.31 million per year to 10.85m.

It looks like a sign that America’s economy has slowed, perhaps hit by weaker growth overseas (although economists are hoping that activity will pick up later this year).

Boom! Britain’s stock market has hit a six-month high.

The blue-chip index of leading shares has gained 44 points, or 0.6%, to 7481, its highest level since last October.

The rally comes as the pound suddenly stumbles, as my colleague Jess Elgot reports that Brexit talks between the government and the Labour party have stalled.

This has knocked sterling down by 0.4 of a cent, to $1.3056.

That’s good for firms with large overseas earnings. So ad giant WPP (+2.1%) and insurance group Prudential (+2.3%) are among the risers, with financial firms and industrial groups among the gainers.

The chancellor tweets...

Older workers are playing a key role in keeping Britain’s employment rate at a record high.

More than 70% of the 457,000 jobs created in the last year were filled by people aged 50 and over, today’s labour market report shows.

Gerwyn Davies, senior labour market analyst for the HR group CIPD, says firms are casting their net wider to find staff, given the tight labour markets.

Changing demographics is undoubtedly a factor, but another possibility is that employers are being forced to widen their recruitment channels and make work more accessible in response to the tightening labour market.

Some of these groups are also more likely to have received more help and support from policymakers, through interventions such as more generous childcare support, as well as National Living Wage increases.

Back to the unemployment report... and Mike Amesbury MP, Labour’s Shadow Employment Minister has pointed out that Britain’s labour market isn’t working for everyone:

“Behind today’s headline figures, average wages are still less than they were ten years ago and in-work poverty is rising faster than employment.

Many people are trapped in low paid, insecure work and 70% of children in poverty now live in working families.

Labour will introduce a Real Living Wage of at least £10 an hour, ban zero-hours contracts and invest in skills and training to build an economy that works for everyone.”

In other news, the German business climate has weakened again... but conditions might look brighter soon.

That’s according to the monthly survey from Munich-based research group ZEW, which tracks sentiment among investors and analysts.

ZEW’s current conditions index has fallen to just 5.5 points, down from 11.1 in March, in the seventh monthly fall in a row. That’s understandable, as the German economy hasn’t posted any growth since last summer.

But its forward-looking economic sentiment index has picked up, to 3.1 points from -3.6 a month ago. ZEW says that the Brexit postponement helped to raise spirits.