London Stocks Up as Labour Market Data Shows Signs of Cooling

British equities opened on a positive note on Tuesday as investors cheered further signs of a cooling labour market in the UK. The benchmark FTSE 100 index gained 0.3% by 7:07 GMT, while the mid-cap FTSE 250 was also up 0.3%.

The pound slipped against the US dollar and was last at $1.2719.

The unemployment rate in Britain for April rose to 4.4% from 4.3%.

A Reuters poll had pointed to an unchanged unemployment rate.

British wages excluding bonuses - which are being watched by the Bank of England (BoE) as it considers when to cut interest rates - grew by 6% in April.

Economists polled by Reuters had forecast wage growth of 6.1%.

Traders are now expecting nearly a 60% chance of a September rate cut by the BoE. The central bank meets in less than two weeks from now to take a call on borrowing costs.

Among individual stocks, Rio Tinto lost 1.9% and was the top loser on the FTSE 100 as the mining giant said it will buy Mitsubishi Corp’s 11.65% stake in Boyne Smelters (BSL) for an undisclosed sum.

Anglo American fell 1.4% after Morgan Stanley resumed coverage on the stock with an “equal-weight” rating. Bucking the trend, Oxford Instruments surged 8.1% after the nanotechnology tools maker reported its full-year results above estimates.