LIVE BUSINESS: Unemployment rises to 4.4%; Raspberry Pi confirms £542m IPO; Heathrow aims for record summer

Elon Musk has branded an investor’s decision to vote against his £45bn pay package for Tesla “not right”.

The world’s richest man faces a backlash from investors when his salary at the electric vehicle maker comes up for 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 increased a little, that should not be a cause for concern.

‘The economy has remained resilient and continues to do so. The Bank of England will be willing to provide further support through interest rate cuts, but the risk of inflation picking up will be the trade-off, although it is just a question of when, not if, they will make the decision.

The US owner of Boots has put plans to float or sell the chemical on hold.

There were hopes that the High Street retailer could list on the London stock exchange by the end of 2024.

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

Heathrow is expecting a record summer this year, with an estimated 30 million passengers traveling through Europe’s busiest airport.

The UK’s hub airport, which served a record 81.5 million 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.

Chief Thomas Woldbye said: ‘We have a winning team at Heathrow who have shown that we have put Covid firmly behind us. Thanks to his extraordinary efforts, we are now giving a record number of people the opportunity to seamlessly connect with the world.

“Supporting 81 million trips not only helps families create wonderful holiday memories, but also contributes to the vital trade and business links that a hub like Heathrow creates for the UK economy.”

British low-cost computing company Raspberry Pi will price its shares at 280 pence, at the top of its estimated price range, in its initial public offering, it said on Tuesday.

The terms suggest a valuation of £541.6 million, the company said in a stock market update. Raspberry Pi will raise £166m with listing.

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

Eben Upton, CEO of Raspberry Pi, said: “The quality of interactions during the marketing process has underlined our belief that London has the right caliber and sophistication as an investor to back ambitious and growing technology companies like Raspberry Pi.” .

“The reaction we have received is a reflection of the world-class team we have assembled and the strength of the loyal community we have grown up with.”

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

The stock market is expected to recover later this year after months of pessimism about the exchange.

Investment bank Peel Hunt said yesterday it expected there to be an “increasing number” of debuts on the London market for the second half of 2023. The broker added it was “increasingly confident” in an even greater revival in the first half of 2025.

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

‘The active labor market is cooling, but not fast enough for policymakers to confidently dip their toes into the waters of rate cuts.

‘The number of vacancies has fallen, but still stands at 904,000, above pre-pandemic levels, and companies are still struggling to find workers to fill crucial gaps in rotations.

‘This is putting pressure on wages as annual growth in average regular earnings has stagnated at 6% over the February and April period.

“Too many people remain sick and illness is partly responsible for rising inactivity rates. Long-term illnesses also mean that family members have had to take on caring responsibilities, preventing them from taking on paid work.

‘This collision of a series of unfortunate events, partly caused by long waiting lists for appointments and NHS operations, will continue to vex decision-makers at the Bank of England. With unemployment rising to 4.4%, it is expected to take further steam out of the labor market, but an interest rate cut this month still seems highly unlikely, particularly considering we are right in the middle of an election campaign. .

‘An interest rate cut in August remains a very real possibility, especially given that other data released over the past week indicates that price pressures in the services sector are easing. However, financial markets did not fully contemplate a cut until November.’

Thomas Pugh, economist at RSM UK:

‘Strong wage growth will give the committee’s hawks some ammunition and the combination of persistent 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 labor market is slowly relaxing. What’s more, the MPC has made it clear that rates at 5.25% are in restrictive territory, so a 25 basis point cut would still be restrictive and hurt inflation. In our opinion, a rate cut in August is the right move.

‘While the attention of financial markets is focused on the impact of wage growth on interest rates, importantly for households, real wages grew by 2.2%.

“That will help households recover some of the loss in their living standards in recent years and, combined with growing consumer confidence, could give a boost to consumer spending in the second half of this year, contributing to a recovery driven by consumer spending.

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

‘The UK labor market has been in something of a state of flux due to statistical problems in reporting data.

“Recently, revised data indicated that the UK had a much stronger labor market than previously thought, and although today it shows some signs of changing, it is still in fairly strong shape and job growth Profits remain strong as we approach the general election.

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

‘So this alone is not going to change the situation for the Bank of England to start cutting rates. Similarly, the UK unemployment rate (for people aged 16 and over) was estimated at 4.4% between February and April 2024.

“What the Bank of England fundamentally wants is for wage inflation to fall further than it has, especially with the headline inflation rate very close to its target.

“The Bank of England will be incredibly cautious about cutting rates in a period when consumer purchasing power is high and could trigger a new bout of inflation. As such, today’s data will continue to put the brakes on a rate cut in June or August, with November being the most likely date to see that first drop.

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 new data from the Office for National Statistics.

But hopes that a easing of the labor market could mean 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 pay rising of 6 percent in the United Kingdom, excluding bonuses, in the second quarter.

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