The FTSE 100 (^FTSE) and European stocks tumbled into the red on Tuesday despite news that the Chinese economy grew faster than expected in first quarter.
Gross domestic product (GDP) rose 5.3% in the country the first three months of the year, beating expectations that the world’s second largest economy would see growth slow to 4.6%.
It came as the Office for National Statistics (ONS) revealed that the rate of UK unemployment rose to 4.2% in the three months to February.
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London’s benchmark index was 1.3% lower in early trade, with miners and banks among the fallers
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Germany’s DAX (^GDAXI) dipped 1.4% and the CAC (^FCHI) in Paris also headed 1.4% into the red
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The pan-European STOXX 600 (^STOXX) was down 1.3%
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Wall Street is set to open lower as S&P 500 futures (ES=F), Dow futures (YM=F) and Nasdaq futures (NQ=F) were all in negative territory
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UK unemployment rate jumps by more than expected
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Superdry (SDRY.L) shares tumble 34% after launch of delisting turnaround plan
Continued concerns over tensions in the Middle East, along with worries over how soon central banks will start cutting interest rates, are dampening risk appetite among investors.
Victoria Scholar, head of investment at interactive investor, said: “Risk-off sentiment is gripping European markets today…as negative momentum from yesterday’s sell-off on Wall Street carries forward to this morning’s price action.
“The strength of the US dollar is proving problematic for risk appetite as hopes fade of a near-term rate cut stateside. San Francisco Fed President Mary Daly said there’s ‘no urgency’ to cut US interest rates.
“There are also worries about rising geopolitical tensions in the Middle East with concerns about how Israel plans to respond to Iran’s attack over the weekend.”
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Rents growing 5.2% faster than earnings
Selly Oak, Birmingham, 4th February 2024 – Houses for rent in Selly Oak, Birmingham, England as the UK Housing Market continues to fluctuate. Credit: Stop Press Media/Alamy Live News (Stop Press Media) The cost of rent has outpaced salary growth by 5.2% over the past 10 years, leaving renters significantly worse-off today than they were a decade ago
Data from Zero Deposit has revealed that in the past decade the average price of rent in England has grown from £742 a month in 2014, to £994 in 2023. This marks an increase of £252 per month or £3,024 per year. In percentage terms, this is a decade increase of 34%.
Meanwhile, the average annual salary in England has grown from £27,919 in 2014 to £35,955 in 2023. This is a cash increase of £8,036 over a decade, equivalent to 28.8%.
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In the East of England, the average salary has grown by 27% since 2014 while the price of rent has grown by 43.1%, meaning renters in the regions are now 16.1% worse off than they were ten years ago.
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In the South West, the gap between rent and salary has widened by 9.7% while the East Midlands (9.6%), South East (9%), North West (6.9%), and West Midlands (3.3%).
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In London, the average salary has increased by 29.8% since 2014, while the price of rent has grown by 22.4%, meaning renters in the capital are, in theory, 7.4% better off today than they were a decade ago.
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In Yorkshire & Humber, renters are 1.4% better off, while in the North East, salaries have outgrown rent increases by 1.1%.
Sam Reynolds, CEO of Zero Deposit said:
“With rent prices rising at a faster rate than earnings, the issue of rental affordability is only getting worse. This means tenants are under increasing financial pressure in day-to-day life, but also means that the ability for them to put money aside is dwindling.
“In turn, this means that any aspirations for home ownership are served a significant blow as people have less opportunity to save for a mortgage deposit.
“Unfortunately there is very little being done to address the issue and urgent action is needed if we’re to improve rental market affordability.”
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Superdry slumps amid plans to delist from London Stock Exchange
Superdry branch of the British clothing chain Superd (Guido Schiefer) Superdry shares (SDRY.L) fell out of fashion with investors, slumping more than 34%, as it announced it plans to delist from the London Stock Exchange.
The beleaguered chain said it would be forced to enter into administration if it did not go ahead with the move.
It is looking to raise up to £10m through an equity raise that would take the firm private.
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Hunt on UK jobs data
London, United Kingdom. March 13 2024. Chancellor Jeremy Hunt is seen outside 11 Downing Street..Credit: Tayfun Salci / Alamy Live News (Tayfun Salci) Chancellor Jeremy Hunt has focused on the boost to workers’ pockets from rising real wages.
He said: “It’s great that real wages have now risen for nine months in a row, and, together with our national insurance cuts worth £900 to the average worker, people should start to feel the difference.”
However, acting shadow work and pensions secretary Alison McGovern took aim at the British government.
She said: “Tory failure is laid bare by the reality that we are now the only country in the G7 with an employment rate stuck below pre-pandemic levels.”
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Watch: What is a recession and how do we spot one?
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