London equities opened strongly on Tuesday, with the FTSE 100 rising 1.0% to 9,881.92 as investors reacted positively to signs of a cooling UK labour market. The FTSE 250 climbed 0.6% to 22,108.55, while the AIM All-Share gained 0.4% to 760.69.
The Office for National Statistics reported that the UK unemployment rate rose to 5.0% in the three months to September, its highest level since early 2021.
Payrolled employment fell by 117,000 year-on-year, with preliminary figures for October suggesting a further decline of 180,000. Vacancies were broadly steady at 723,000. Wage growth slowed slightly but remained above inflation, with regular pay up 4.6% and total pay rising 4.8%.
The weaker labour market has sparked speculation that the Bank of England could cut interest rates in December, easing concerns over inflationary pressures.
Among individual movers, Vodafone led the FTSE 100, surging 6.4% after reporting strong interim results and unveiling a progressive dividend policy. Revenue rose 7.3% to €19.61 billion, while adjusted EBITDA increased 5.9%. The company also announced a €500 million share buyback and a 2.25 euro cent interim dividend.
Croda International slipped 3.8% after Jefferies and Goldman Sachs cut their ratings and price targets. Grocery chains faced pressure as UK grocery inflation eased to 4.7% over the past 12 weeks. Tesco fell 2.4%, Sainsbury’s dropped 2.0%, while Ocado bucked the trend, rising 2.2% after reporting 15.9% year-on-year sales growth.
On the FTSE 250, Hilton Food Group plunged 22% after warning that the US government shutdown delayed approval for its new Greek salmon facility. In contrast, 4imprint Holdings soared 19% after raising its 2025 profit guidance. Among small-caps, Amazing AI tumbled 46% after announcing a spin-off of its Mauritius-based subsidiary to shareholders.
US markets rallied on Monday after the Senate approved a compromise funding bill to end the government shutdown. The Dow Jones rose 0.8%, the S&P 500 climbed 1.5%, and the Nasdaq jumped 2.3%, adding to London’s early momentum.