BUSINESS LIVE: Wage growth beats expectations; Tui swings to profit; MPs warn on nuclear plans

Thomas Pugh, economist at RSM UK:

‘We doubt that the new lower unemployment rate of just 3.8% will lead to a significant delay to the first cut in interest rates. The continuing uncertainty around the employment statistics mean the MPC will put much greater weight on pay growth and survey data than it would usually.

‘Here the news is better – pay growth is slowing quickly and almost all the unofficial data suggests the labour market is easing. As a result, we still think the first rate cut is still likely to come in early summer.

‘The new unemployment rate of 3.8% will no doubt set some alarm bells ringing. However, there are still huge concerns about the quality of the data.

‘More important for the inflation outlook is the pay figures. Private sector wage growth excluding bonuses, the measure most reflective of underlying pay pressures, slowed from 6.7% to 6.2%. And the 3m/3m annualised measure, which is a better indicator of current pay pressures, fell to just 2%, the slowest rate since the pandemic.

‘Just as importantly for households, real wages grew by 1.4%. That, combined with potential tax cuts and rising consumer confidence could give a spending boost in the second half of this year, helping to drive a recovery.

‘Overall, even though pay growth is still double the 3% – 3.5% that the MPC thinks is consistent with 2% inflation, there are clear signs that the economy is on the edge of recession. Pay growth is slowing and inflation is falling more quickly than expected, so it probably won’t be long before rate cuts are on the table even if the unemployment rate remains stubbornly low.’

The ‘Golden Mile’ in Western Australia was once considered the richest square mile on earth after prospectors flocked here during the gold rush of the late 19th century.

It is now at the epicentre of a global rout in the price of battery metals, as a slow-down in electric vehicles sales has coincided with a surge in supply.

The Goldfields region has become a magnet for a new wave of prospectors, from home-grown billionaires to global mining giants and small-time speculators – all competing for the bounty of lithium which also lies beneath the red dirt.

A committee of MPs has warned the Government that the planned roll-out of a fleet of small nuclear reactors is unlikely to help hit a key decarbonisation target.

The Environmental Audit Committee said the approach to developing factory-built nuclear power plants ‘lacks clarity’ and their role in hitting a goal of moving Britain’s energy grid to clean energy by 2035 was unclear.

Chair Philip Dunne MP said: ‘This uncertainty risks knock-on effects for industry confidence: not only for investment decisions relating to the initial build and the construction of factories to build reactor modules, but also for the support and growth of supply chains and skills.

‘We simply don’t yet know how much SMRs will contribute to electricity generation in the country, nor how much the roll-out is likely to cost the taxpayer.’

One of the United States’ most sought-after private oil producers has been snapped up in a deal worth £21billion.

Shale producer Diamondback Energy said it would buy Endeavor Energy, which is the largest privately held oil and gas producer in the Permian Basin, the biggest US oilfield.

Tui has posted a better-than-expected first quarter performance, with Europe’s biggest travel group swinging to a profit for the period.

The company reported an operating profit of €6million (£5.1million) versus a loss of €153million during the same quarter a year ago.

Tui was expected to report a loss of €102million in the first quarter, according to an LSEG analysis.

TUI maintained its outlook for a 25 per cent growth in operating profit in the 2024 financial year and also set a medium-term target for a compound annual growth rate of 7 to 10 pe cent.

Europe’s airlines are entering 2024 with robust outlooks as travel demand is expected to surpass pre-pandemic levels despite economic uncertainty, delays in plane deliveries from manufacturers, and rising jet fuel prices.

Aldi has pledged to plough more than half a billion pounds into opening stores as the supermarket wars hot up.

The discounter is investing £550million this year as it hopes to open 500 more stores to bring its total number to 1,500.  Aldi said its expansion push will create more than 1,500 jobs this year.

British wages before bonuses grew by a higher-than-expected 6.2 per cent in the final three months of 2023 as the unemployment rate fell to 3.8 per cent, according to fresh data from the Office for National Statistics.

Wage growth beat forecasts of 6 per cent for the quarter and will add to Bank of England concerns about impact on the overall rate of inflation.

The BoE is watching pay growth closely as it tries to gauge how much inflation pressure remains in the economy and whether it can start to consider cutting interest rates from their highest level since 2008.