BUSINESS LIVE: Unemployment rises to 4.4%; Raspberry Pi surges on £542m IPO; Heathrow eyes record summer

The mental picture of enormous graveyards of batteries piled high is one of the most common negative ideas surrounding electric cars.

While electric vehicles (EVs) have numerous environmental and health benefits – zero tailpipe emissions being the most obvious – they use materials that have an environmental impact.

Roaring Kitty has come roaring back. The meme stock craze is once again gripping global financial markets.

But what on earth is a meme stock and who is Roaring Kitty? Can investors make their fortunes – or should they stay well clear?

Business leaders have urged Labour to avoid the ‘populist trap’ of increasing capital gains tax if the party wins the general election, warning it could hit economic growth.

Sir Keir Starmer‘s party has explicitly ruled out increasing income tax, VAT, corporation tax and National insurance. if he wins power on July 4.

On Wednesday, Rishi Sunak announced the next general election will be on 4 July.

The economy is likely to take centre stage as both major parties ramp up campaigning.

Heathrow is gearing up for a record summer, during which it anticipates around 30 million passengers travelling through the airport.

Britain’s busiest airport reported a record-breaking 81.5 million passengers travelled in the 12 months to May, up 13.9 per cent year-on-year.

Raspberry Pi shares soared on their London public markets debut as the tech firm sought a £166million fundraise.

The budget computer maker, whose products are popular with amateur coders and hobbyists, plans to use the cash raised for engineering capital expenditures, bolstering its supply chain, and ‘other general corporate purposes’.

We are under attack. Or to be more exact, the IT systems on which modern life depends are being besieged by hackers.

This is turning attention to investing in cyber-security, the name given to the processes and technologies designed to defend us from this crime which is forecast to cost companies, governments and individuals $10 trillion a year from 2025.

GSK’s blockbuster respiratory jab has been approved for a younger age group in a boost for the drugmaker over rival Pfizer.

The US Food and Drug Administration (FDA) has given the green light for Arexvy to be prescribed to patients between the ages of 50 and 59.

Sterling rose above €1.18 against the single currency following Emmanuel Macron’s shock decision to call a snap election in France.

The euro slumped to a near two-year low against the pound yesterday as markets were stunned by Emmanuel Macron’s shock decision to call a snap election in France.

Sterling rose above €1.18 against the single currency to hit its highest level since August 2022 after the French president’s move, which followed a bruising performance for his party in European parliamentary vote.

Japan, a nation which prides itself on a tradition of honour, has been rocked by the biggest scandal to hit its automotive sector in years.

Five major auto makers are at the heart of an ongoing probe by government authorities after all admitted filing false safety reports to gain vehicle certification.

London-listed stocks are trading higher this morning as investors tentatively cheer further signs of a cooling labour market.

Traders are now expecting nearly a 60 per cent 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.

Rio Tinto weighs on gains, falling 1.9 per cent, after the mining giant said it will buy Mitsubishi Corp’s 11.65% stake in Boyne Smelters (BSL) for an undisclosed sum.

Anglo American is down 1.4 per cent after Morgan Stanley resumed coverage on the stock with an ‘equal-weight’ rating.

Bucking the trend, Oxford Instruments has surged 8.1 per cent after the nanotechnology tools maker reported its full-year results above estimates.

Richard Hunter, head of markets at Interactive Investor:

‘UK markets regained some poise after a poor start to the week, although gains were tempered by some weakness across the mining sector.

‘Even so, housebuilders, supermarkets and even the utilities were subject to buying interest which propelled the FTSE100 higher to now stand up by 6.8% so far this year, as a general warming of investment sentiment towards the UK continues to build slowly.

‘The release of jobs data in the UK contained conflicting forces which are unlikely to move the dial in terms of a possible interest rate cut in August. The headline unemployment rate ticked marginally higher to 4.4%, above both the previous reading as well as estimates of 4.3%, which could bolster some optimism of a cooling labour market.

‘However, more ominous were average earnings which rose by around 6% including and excluding bonuses, slightly above consensus and adding to fears that wage inflation reduces the likelihood of an imminent easing from the Bank of England.

‘There are also some concerns that while the more recent dip in inflation has brought the number nearer to the Bank’s 2% target, the decline been largely driven by energy prices.

‘As such, when these effects normalise, the possibility remains that inflation could remain elevated given the ongoing rise in wages. As such, the inconclusive jobs data did little to move sterling as a result, with more evidence needed before the Bank of England can contemplate monetary easing with the conviction which it will need.’

Elon Musk has called an investor’s decision to vote against his £45billion Tesla pay package ‘not cool’.

The world’s richest man is facing an investor backlash when his pay at the electric vehicle maker is put to a vote on Thursday.

Neil Birrell, chief investment officer at Premier Miton Investors:

‘Wage growth remains strong in the UK which will help keep the consumer sector buoyant and support the economy. Although unemployment ticked up a bit, that should not be of any concern.

‘The economy has remained resilient and that is still the case. The Bank of England will be keen to provide further support through interest rate cuts, but the risk of inflation picking up will be the counter to that, although it is only a question of when, not if, they make the move.’

The US owner of Boots has put plans for a float or sale of the chemist on ice.

There had been hopes that the High Street retailer could be listed on the London stock market by the end of 2024.

But it is understood that Walgreens Boots Alliance (WBA) has decided not to make any major decisions over the pharmacy chain until 2025.

Heathrow expects a record summer this year, with an estimated 30 million passengers set to travel via Europe’s bussiest airport.

The UK hub airport, which served a record-breaking 81.5m passengers in the 12 months to May, also said on Tuesday it is already preparing for the winter trading season with the launch of a new route to Tromsø in Norway ‘for Aurora-seekers and Arctic adventurers’.

Boss Thomas Woldbye said: ‘We have a winning team at Heathrow which has proven that we have put Covid firmly behind us. Thanks to their extraordinary efforts we are now giving record numbers of people the chance to connect smoothly with the world.

‘Supporting 81m journeys doesn’t just help families to make wonderful holiday memories, importantly it is about the vital trade and business links a hub like Heathrow creates for the UK’s economy.’

UK budget computer firm Raspberry Pi will price its shares at 280p, at the top of its estimated pricing range, in its initial public offering, it said on Tuesday.

The terms suggest a valuation of £541.6million, the company said in a stock market update. Raspberry Pi is set to raise £166million from the listing.

Shares will begin trading on the London Stock Exchange once the market opens at 8am on 11 June.

Eben Upton, chief executive of Raspberry Pi, said: ‘The quality of the interactions during the marketing process has underlined our belief that London has the right calibre and sophistication of investor to support growing, ambitious technology businesses such as Raspberry Pi.

‘The reaction that we have received is a reflection of the world-class team that we have assembled and the strength of the loyal community with whom we have grown.’

The IPO has been hyped as a welcome victory for the London market, which has been hit by a swathe of UK-listed firms being bought out or defecting abroad.

The stock market is set for a pick up later this year after months of doom mongering about the exchange.

Investment bank Peel Hunt said yesterday it was expecting there to be an ‘increasing number’ of London market debuts by the second half of 2023. The broker added that it had ‘further confidence’ of an even bigger revival in the first half of 2025.

Susannah Streeter, head of money and markets at Hargreaves Lansdown:

‘The hot labour market is cooling, but not fast enough for policymakers to confidently dip their toes into rate cut waters.

‘The number of vacancies has fallen back, but still stands at 904,000, above pre-pandemic levels, with companies still scrabbling for workers to fill crucial gaps in rotas.

‘This is putting pressure on wages, with the annual growth in average regular earnings stuck at 6% for the February and April period.

‘Far too many people are still ill, with sickness partly responsible for the increase in inactivity rates. Long-term sickness also means family members have been landed with caring responsibilities, preventing them from taking up paid work.

‘This collision of a series of unfortunate events, partly prompted by long waiting lists for NHS appointments and operations, will continue to niggle the Bank of England’s decision makers. With unemployment rising to 4.4%, it’s set to take further steam out of the labour market, but it still seems highly unlikely there will be an interest rate cut this month, particularly given it’s bang smack in the middle of an election campaign.

‘An interest rate cut in August is still a very real possibility, especially with other data coming through over the past week indicating that price pressures in the services sector are easing. However, the financial markets have not been fully pricing in a cut until November.’

Thomas Pugh, economist at RSM UK:

‘Strong pay growth will give the hawks on the committee some ammunition and the combination of sticky inflation and the election means there is almost no chance of a rate cut next week.

‘But inflation is clearly returning to normal levels and the labour market is easing slowly. What’s more, the MPC has made it clear that rates at 5.25% are well into restrictive territory so a 25bps cut would still leave them restrictive and bearing down on inflation. In our opinion an August rate cut is the right move.

‘While the focus in financial markets is on the impact of pay growth on interest rates, importantly for households, real wages grew by 2.2%.

‘That will help households claw back some of the loss in their living standards over the last few years and combined with rising consumer confidence could give a boost to consumer spending in the second half of this year, helping a consumer spending driven recovery.’

Richard Carter, head of fixed interest research at Quilter Cheviot:

‘The UK labour market has been in somewhat in a state of flux due to statistical issues in reporting the data.

‘Recently the revised data indicated the UK had a much stronger jobs market than was previously thought, and while today shows some sign of it turning, it remains to be in a fairly robust shape and earnings growth remains strong as we head towards the general election.

‘The number of payrolled employees in the UK decreased by 36,000 (0.1%) between March and April 2024, but rose by 201,000 (0.7%) between April 2023 and April 2024.

‘Therefore, this on its own is not going to shift the needle for the Bank of England to start cutting rates. Similarly, the UK unemployment rate (for people aged 16 years and over) was estimated at 4.4% in February to April 2024.

‘What the Bank of England crucially wants to see is wage inflation fall more than it has, especially with the headline rate of inflation very much near target.

“The BoE will be incredibly cautious to cut rates at a period when spending power is high for consumers and potentially triggering a fresh inflationary bout. As such, today’s data will continue to put a dampener on a rate cut in June or August, with November remaining the likeliest date to see that first fall.’

The UK unemployment rate rose to 4.4 per cent in the three months to the end of April, up from 4.3 per cent in the previous quarter, according to fresh data from the Office for National Statistics.

But hopes that an easing labour market could spell an interest rate cut at this month’s meeting of the Bank of England’s Monetary Policy Committee are kept in check by strong wage growth, with UK pay excluding bonuses up 6 per cent in the second quarter.

But economists had forecast wage growth of 6.1 per cent for the quarter, while they expected the unemployment rate to remain at 4.3 per cent for the period.