Market snapshot as FTSE 100 opens higher

The FTSE 100 is higher this morning as slightly slower-than-expected wage growth has increased hopes that interest rates have peaked.

Take a look at our full market snapshot

Housing market slowdown means Bellway to slash building by over 30% in 2024

Bellway, the FTSE 250 developer, gave fresh insight into the extent of the slowdown in the UK’s housing market today, with plans to cut the number of houses built next year by 31%.

The Newcastle-based firm said it will complete “around 7,500 homes in 2024, down from a “near-record” of 10,945 this year, which it called “a material reduction in volume” due to a “reduced order book and prevailing lower reservation rates.”

Higher mortgage costs after 14 consecutive interest rate hikes from the Bank of England took the base cost of borrowing up to 5.25% have been reverberating rounds the industry, hitting first time buyers particularly hard and slowing sales rates across the market.

Bellway also said today it expected the average selling price of its homes to drop in 2024 – to £295,000 from £310,306 this year, a drop of almost 5%.

For the financial year to the end of July, Bellway reported a 3.7% drop in revenue of £3.4 billion and an 18% fall in profit before tax of £532.6 million.

Rio Tinto boss hails “strong progress”

Rio Tinto shares have closed 1% higher in Sydney after the iron ore giant delivered its production update for the third quarter.

It said shipments from its Pilbara iron ore operations in western Australia rose 1% to 83.9 million tonnes as it continues to target a performance for the year in the upper half of the original 320 to 335 million tonnes range.

Chief executive Jakob Stausholm also reported “good headway” ramping up the Oyu Tolgoi high-grade underground copper mine in Mongolia, while Rio’s Kitimat aluminium smelter returned to full production.

He also highlighted agreements for a leading position in recycled aluminium in North America and a joint venture with Codelco to explore for copper in Chile.

Stausholm told investors: ““We are making strong progress towards building the Rio Tinto of the future, striking a balance between disciplined performance in evolving market conditions, investing to generate valuable long-term growth and delivering attractive shareholder returns.”

Chancellor hails real pay growth

The Chancellor of Exchequer, Jeremy Hunt, highlighted theat wage growth came in ahead of inflation, meaning that real pay is growing.

He said: “It’s good news that inflation is falling and real wages are growing, so people have more money in their pockets. To keep this progress, we must stick to our plan to halve inflation.”

However his counterpart on the opposition benches Rachel Reeves said: “Thirteen years of Conservative economic failure has left working people worse off, with low growth, low pay and high taxes.

“Working people saw pay rise faster under the last Labour government. But, with the Conservatives we have seen a decade of stagnant wage growth.

“Labour’s plan to grow the economy will boost wages, create good jobs and get Britain’s future back.”

Rolls-Royce to cut 2,000 to 2,500 jobs

Rolls-Royce has announced plans to cut between 2,000 and 2,500 jobs across its global operations as part of its long-term transformation under chief executive Tufan Erginbilgic.

The FTSE 100 engineer, which employs 42,000 people, said the changes would “remove duplication and deliver cost efficiencies”.

Its restructuring plans will bring its Engineering Technology & Safety unit “together as a single team across the group”. It will be “responsible for product safety, engineering standards, process, methods and tools,” Rolls-Royce said, and “enable engineering talent and technology to be used more effectively across the business.” It will be led by Simon Burr, currently the director of product evelopment and technology, in its Civil Aerospace division.

Rolls-Royce also said Grazia Vittadini, chief technology officer, will be leaving t in April 2024.

The plans also include a group-wide “procurement and supplier management organisation” to consolidate spending.

Tufan Erginbilgic said : “This is another step on our multi-year transformation journey to build a high performing, competitive, resilient and growing Rolls-Royce,” adding:

“We are building a Rolls-Royce that is fit for the future. That means a more streamlined and efficient organisation that will deliver for our customers, partners and shareholders.”

Strong gains for US and Asia markets, FTSE 100 seen flat

The S&P 500 index advanced by more than 1% yesterday, with investors in an optimistic mood ahead of this week’s results by the likes of Tesla and Netflix.

Shares in tech giants Amazon and Meta Platforms were 2% higher as the tech-focused Nasdaq Composite improved 1.2% by last night’s close.

Asia markets reflected Wall Street’s performance as Hong Kong’s Hang Seng index rose by 0.7% in afternoon trading and the Nikkei 225 rallied by 1%.

The FTSE 100 index yesterday lifted by 0.4% or 31.03 points to 7630.63, but CMC Markets expects an unchanged performance at today’s opening bell.

On commodity markets, Brent Crude stood at just below $90 a barrel this morning as supply fears caused by the Middle East conflict underpin prices.

UK pay grows by another 8.1%

Avergae pay in the UK including bonuses grew by 8.1% from June to August, slightly below expectations.

When bonuses are excluded, pay was up by 7.8%, in line with expectations.

Recap: Yesterday’s top stories

Good morning. Here’s a summary of our top headlines from yesterday: