The UK unemployment rate remains at its lowest in nearly 50 years after figures today showed a dip to 3.5% in the three months to August.

However, the number of people in employment fell by 109,000 over the previous quarter amid a rise in those not looking for work.

Growth in regular pay excluding bonuses was 5.4% in June to August, meaning another big fall in real terms when adjusted for inflation.

Read more on UK unemployment figures

FTSE 100 Live Tuesday

• Bank of England widens scope of market intervention

• Grocery inflation hits record high

• FTSE 100 lower as miners fall

Uber, Lyft and Doordash plummet on fears of Biden gig economy rule changes

15:53 , Simon Hunt

Shares in Uber, Lyft and Doordash tanked today after the Biden administration brought forward plans that could see some gig economy workers be reclassified as full-time workers.

Doordash shares dropped 10%, Uber fell and 13% and Lyft sank 13% to a record low of $42, as investors feared the move would lead to a jump in the firms’ wage bills.

A change in status for gig economy workers would afford them extra job security including minimum wage and overtime pay.

U.S. Labor Secretary Marty Walsh said some businesses had misclassified vulnerable workers as contractors.

“Misclassification deprives workers of their federal labor protections, including their right to be paid their full, legally earned wages," he said.

IMF says government’s tax plans ‘complicate’ the fight against inflation

14:48 , Michael Hunter

The International Monetary Fund has cut its forecast for world growth forecast and advised central banks to “prioritise” bringing inflation down as it publishes its latest World Economic Outlook.

It predicted a “significant slowdown” in UK growth -- to 0.3% in 2023 from 3.6% this year -- “as high inflation reduces purchasing power and tighter monetary policy takes a toll on consumer spending and business investment.”

The IMF, which acts as the lender of last resorts to nations, pointed out its forecasts were made before what it called the UK’s “sizable fiscal package”, Kwasi Kwarteng’s unfunded tax cuts which sparked a sell-off across the country’s financial assets.

It said the measures were expected to lift growth somewhat above the forecast in the near term while complicating the fight against inflation”.

Global growth is expected to slow to 3.2% in 2022 from 6% in 2021, reaching 2.7% in 2023, the “weakest growth profile” since 2001, outside the shocks of the Covid-19 pandemic and the 2008 financial crisis.

Pension providers slump as fears over the sector’s financial position return after fresh BoE intervention

13:38 , Michael Hunter

Shares in pension fund providers were the biggest fallers on the FTSE 100 as worries about the financial position of the industry returned after the Bank of England overhauled its intervention in the market in government debt.

Bonds are used by fund managers to help meet their complex financial commitments and the sharp falls in the price of the debt after the government’s so-called mini-Budget has reverberated around the sector.

The BoE warned again of “dysfunction” in the debt market as it widened the range of gilts it will buy in order to keep it functioning in an orderly manner and to avoid “the prospect of self-reinforcing ‘fire sale’ dynamics” which it said “pose a material risk to UK financial stability.”

There were big-name investors in the debt markets written right across the list of the biggest decliners on the UK’s main stock index. Aviva made the largest fall in percentage terms, down 3.4% to 387p, loss of 14p per share. Legal & General was down 3.3% or 7p to 217p. Hargreaves Lansdown fell 3% to 843p, a loss of 26p.

The FTSE 100 fell 41 points overall to 6,918.80 in mid-session trade, a loss of 0.6% for the day. That took its loss for the year to almost 2%.

The intervention, which it increased to a potential £10 billion per day, will now also apply to index-linked gilts, which are designed to protect their holders from the impact of inflation on the asset’s returns. The BoE was already buying long-dated gilts, which mature over 30 years and were under the most pressure after the government overhauled its spending plans.

The Treasury said yesterday it would bring forward a statement on its medium-term tax plans to October 31 from late Novemeber, along with forecasts covering the measures from the Office for Budgetary Responsibility. The Bank of England plans to end its intervention on Friday.

There were calls from industry body the Pensions and Lifetime Savings Association for the BoE to extend the lifespan of the measures. It said: “A key concern of pension funds since the Bank of England’s intervention has been that the period of purchasing should not be ended too soon, for example, many feel it should be extended to the next fiscal event on October 31 and possibly beyond.”

Bank needs to do it like Draghi

13:20 , Simon English

Back in July 2012, Mario Draghi stepped into save the day.

The eurozone had a spiralling debt crisis that was battering the currency.

Around him, politicians were being unhelpful, telling him to spend less money in ways that unnerved already febrile markets.

His response was simply to say that he would do “whatever it takes” with the ECB’s unlimited fire power to be the buyer of last resort for sovereign debt and whatever else needed stabilising.

Panic sell if you want, he was saying to commercial banks, but I’ve got more money than you can ever dream of, and I’m buying. It worked.

The Bank of England is hardly any less powerful an institution, it just lately looks it is is, like you can bet against it and win.

Its intervention in the gilt market last week was vital. Saying how much it would spend and when it would stop spending was an unhelpful detail. It gave the markets a clear suggestion that a white-flag was being readied in the background.

Yesterday, with gilts again in turmoil, it backtracked somewhat and said it would speed up bond purchases to avoid a “cliff edge” on Friday.

Today it said more action was needed to “restore orderly conditions”, with markets increasingly unclear that it has the will power or political backing to do that.

The pickle the Bank is in is not entirely of its own making, but pickle it is.

It is now playing Draghi-catch up and will have to keep doing so until markets believe in the strength of its will. Until then, there should be no more deadlines, no more specific amounts of money to be pumped into whichever part of the market is rebelling.

The message from Threadneedle Street should be an uncomplicated one: We got this.

Recruiter Robert Walters warns of ‘uncertain’ economic climate

10:53 , Mark Banham

Global recruitment business Robert Walters has warned that the macro-economic background became “more uncertain” during the third quarter of the year as it recorded a dip in UK profit of 6% as an shifts in the labour market take hold.

The UK stood out as the only drop in profit as group profits from fee incomes for job candidates increased by 18%across the year to £112 million, profits across Europe climbed by 32% and Asia Pacific figures were boosted by 16%.

International business accounted for 84% of the group’s net fee income up slightly from 80% during quarter three last year as the recruiter set out its global footprint opening two new offices in Austin, Texas and Berlin.

Employee levels at Robert Walters also rose 5% quarter-on-quarter to 4,267 up from 4,051 at  June 30 this year.

Chief executive Robert Walters, said: “The macro-economic backdrop became more uncertain as the quarter progressed. Nevertheless, job flow remained largely strong, candidate shortages remained acute, wage inflation continued to grow; and group net fee income increased by 18% year-on-year.”

Heathrow working on new plan to avoid Christmas chaos as passenger cap goes, travel stocks head north

10:48 , Michael Hunter

London and the UK’s busiest airport is drawing up plans to avoid travel chaos at Christmas after confirming that it will lift its cap on daily passenger numbers at the end of October.

Heathrow’s controversial 100,000 limit came in to avoid a summer repeat of the large number of short-notice cancellations that blighted the Easter getaway. A lack of baggage handlers and other support staff meant it struggled to cope amid a huge rise in demand that kicked in after Covid travel restrictions were lifted.

It said it was developing “a more targeted mechanism” with airlines to minimise disruption during the festive season.

Heathrow reported that almost 6 million people used the airport in September, around 15% below pre-Covid levels in 2019.

Travel stocks were higher on Tuesday, with the parent of BA, International Consolidated Airlines, up 1p to 103p, a rise of 0.8%. EasyJet was up 8p to 304p, a gain of almost 3%. Wizz Air was up 43p to 1416p, a rally of over 3%.

Heathrow said its focus for the next 12 months was to get the business back to where it was before the pandemic. But it also warned of an “uncertain” outlook for demand into the winter, due to the “escalating” war in Ukraine and a “new wave of Covid”.

Read more on Heathrow here

FTSE 100 down 0.9%, miners lower

08:49 , Graeme Evans

Stock market sentiment continues to weaken across Europe after the FTSE 100 index fell 0.9% or 64.59 points to 6894.72 and the FTSE 250 lost 137.03 points to 16,988.26.

Big fallers in the top flight included the mining giants Rio Tinto and Anglo American after declines of more than 2%, while insurers Aviva and Legal & General lost 3%.

Broker upgrades boosted shares in British Gas owner Centrica and retail chain Next, with the latter now seen as a “buy” opportunity by analysts at Numis Securities. Next shares lifted 42p to 4571p, which compares with the new Numis price target of 6800p.

In contrast, B&Q owner Kingfisher fell 1.2p to 211p after Numis slapped a price target of 150p and “sell” recommendation on the stock.

In the FTSE 250 index, Ukraine-based iron ore pellets exporter Ferrexpo fell 8% or 10.3p to 116.7p after it said it had temporarily suspended operations due to power outages in the wake of Monday’s Russian missile strikes.

Grocery inflation hits record highs adding £643 to the average annual shopping bill

08:01 , Rhiannon Curry

Consumers are facing an extra £643 on the annual cost of their supermarket shopping as food price inflation hits record highs.

The latest data from research firm Kantar showed that grocery inflation now stands at 13.9%, the highest it has been since the company began tracking prices in this way during the 2008 financial crash.

Fraser McKevitt, head of retail and consumer insight at Kantar, said the latest figures would make “tough reading” for cash-strapped consumers.

Read more here.

Bank of England warns of ‘fire sale’ market as it extends intervention to cover index-linked bonds

07:48 , Michael Hunter

The Bank of England widened the scope of its market intervention today, announcing that it would start buying index-linked government debt as well as long-dated gilts.

It warned of “dysfunction in the market” in the index-linked gilt market, where the returns investors receive are adjusted in line with inflation and designed to protect returns against rising prices.

It added that “the prospect of self-reinforcing ‘fire sale’ dynamics pose a material risk to UK financial stability” as it overhauled the intervention it first made in the wake of the government’s so-called “mini-Budget” in September, that sparked a run on UK assets and fears of a financial crisis.

The BoE will spend up to £10 billion of government bonds each day until Friday, £5 billion in index-linked gilts and £5 billion in long-dated debt.

Read more here

ScS revenues up but warns on ‘subdued’ recent trading

07:47 , Mark Banham

Trading has been “subdued” in recent months as the challenges to consumers of “high inflation” impacting disposable income has hit big ticket items, according to leading sofa retailer ScS.

This did not stop the business that has just under a hundred stores across the UK achieving a “record” revenue boost of 8.6% for the full year until July from £305.2 million to £331.6 million. Sales were up 8% from £319 million to £344.7 million.

However, during the period, pre-tax profit dropped from £22.7 million to 16.4 million a dip of £6.3 million.

The business said that, as has been widely reported across the home furnishings landscape, that has recently seen rival furnishings retailer Made put up for sale, that  inflationary pressures and reduced consumer confidence continue to impact visitor numbers - both physical and digital - to businesses which retail big ticket discretionary items.

“Initial trading in the year has been tougher than we saw in the second half of 2022, with order intake for the first ten weeks of the new financial year down 7.8% on a like-for-like basis,” said ScS.

Steve Carson, boss of of the company, said: “We are pleased to be announcing results that are ahead of market expectations.

“The year saw the group deliver record sales, maintain its strong gross margin and manage costs effectively, resulting in a 68% increase in underlying profit before tax, excluding business rates relief. We also saw excellent progress in year one of our refreshed strategy, including strengthening our teams as we look to drive the business forward in the coming years.”

YouGov may win investor approval ratings after jump in profits

07:44 , Simon Hunt

Investor approval ratings of YouGov are likely to be higher today after the polling company posted a 34% rise in profits.

The firm, co-founded by Conservative MP Nadhim Zahawi, saw sales grow 31% to £221 million in the year to July, while pre-tax profits topped £34 million.

The London-based business said its sales had been resilient despite turbulent market conditions, and it was optimistic for the months ahead.

YouGov boss Stephan Shakespeare said: Our growth in the reported year has continued to accelerate, and we achieved further margin improvement and robust cash generation during the period.

Demand for YouGov’s products and services remains strong and we continue to win new clients while expanding our relationships with existing clients.

Sterling at $1.10, FTSE 100 seen lower

07:32 , Graeme Evans

Sterling continues to struggle against the strengthening US dollar, falling 0.6% to just above $1.10 in the wake of today’s UK unemployment figures.

The 10-year gilt yield, which rose yesterday despite the Bank of England increasing its maximum daily bond purchases to £10 billion, was little changed on yesterday’s level at 4.47%.

Bond markets are likely to remain choppy until the chancellor unveils his medium-term fiscal plan, the date of which was yesterday brought forward to 31 October.

CMC Markets expects the FTSE 100 index to fall another 32 points to 6927 this morning, having lost 0.5% in the previous session after Wall Street confidence was hit by expectations for another big hike in US interest rates.

US markets last night closed lower for the fourth session in a row, with traders focused on Thursday’s inflation report for further indications on the potential peak for US rates.

Marston’s pubs looks to World Cup for bounce-back

07:24 , Simon Hunt

Pub chain Marston’s continues to lag behind its pre-pandemic performance as it posted annual sales that came in 1% behind pre-pandemic levels.

The firm warned electricity prices in recent weeks had been higher than anticipated as a result of a ‘volatile market’. There were some signs of green shoots, though, with sales in recent weeks 4% above 2019 levels and hopes for a World Cup boost later in the year.

Marston’s boss Andrew Andrea said: Marston’s has a long-term capital structure which is well suited to the current market environment and we remain committed to our debt reduction strategy with which we continue to make progress. We are managing cost inflation well with food, drink and energy costs covered for the immediate future.”