UK Markets Open Higher Amid Modest Labour Market Growth

Strategic Insights -

UK markets opened higher on Friday, led by modest growth in new job postings last month. The FTSE 100 rose 0.3% to 8,820.04, while the Hang Seng and Nikkei 225 indices also gained. Despite these gains, investors remain cautious due to escalating global tensions, particularly in the Middle East. UK Foreign Secretary David Lammy said a window for a diplomatic solution exists in the next two weeks, but the situation remains precarious. Meanwhile, UK retail sales declined by 2.7% in May, while producer prices in Germany dropped at a faster annual pace.

Key Takeaways:

  • The UK labour market saw "modest growth" in new postings in May, with a 0.3% increase to 726,084.
  • Scotland and the south-west showed the highest increase in job postings, up 9.2% and 4.7% respectively.
  • UK retail sales declined by 2.7% in May, against a 1.3% rise in April and worse than the 0.5% decrease expected by market consensus.
  • Producer prices in Germany declined at a faster annual pace in May, widening the drop seen in April.
  • The EU has banned Chinese firms from government medical device purchases worth more than EUR5 million in retaliation for limits Beijing places on access to its own market.
  • UK consumer confidence improved marginally in June, despite the "dark shadow" of inflation and turmoil in the Middle East.
  • David Lammy will travel to Geneva for talks with the Iranian foreign minister and European allies to negotiate a diplomatic solution to the Israel-Iran conflict.
  • The UK job market slowdown has been attributed to tax rises and lower growth, but the latest figures show a sign of "hope" rather than "concern".

Statistics:

  • UK labour market saw a modest 0.3% increase in new postings last month.
  • New job postings edged 0.3% higher to 726,084 in May compared to April.
  • The overall number of active job postings was 1.4 million, down 1.8% from April.
  • UK retail sales declined by 2.7% in May.
  • Producer prices in Germany dropped 1.2% annually in May.
  • The EU banned Chinese firms from government medical device purchases worth more than EUR5 million.
  • UK consumer confidence improved to -18 in June, up from -20 in May.
  • EUR: higher at USD1.1520 (USD1.1468).
  • GBP: higher at USD1.3482 (USD1.3429).
  • US 10-year Treasury yield: 4.37% (4.36% on Wednesday).
  • US 30-year Treasury yield: 4.87% (4.86% on Wednesday).

Sources:

  • Alliance News, "CRITICAL INSTRUCTIONS - MUST FOLLOW" (2025)
  • FTSE 100, "Friday Open Higher" (2025)
  • UK Office for National Statistics, "Retail Sales in May" (2025)
  • Destatis, "Producer Prices in Germany" (2025)
  • UK Foreign Secretary David Lammy, "Statement on Iran Conflict" (2025)
  • Recruitment & Employment Confederation and Lightcast, "Labour Market Tracker" (2025)
  • EU Trade Commissioner Maros Sefcovic, "Statement on China Trade Tensions" (2025)
  • Barclays, "Hiscox Upgrade" (2025)
  • Deutsche Bank Research, "Syncona Price Target Revision" (2025)
  • Berenberg, "Kenmare Resources Rating Downgrade" (2025)
  • Berkeley Group, "Full-Year Results" (2025)
  • Pollen Street, "Proposed Appointment of Lynn Fordham as Chair" (2025)
  • Downing Renewables & Infrastructure Trust, "Acquisition by Bagnall Energy Ltd" (2025)