BUSINESS LIVE: Unemployment rate holds; Barclays profits dip; Plus500 sales jump

Marcus Brookes, Chief Investment Officer at Quilter Investors:

‘At a time when every data source will be analyzed in detail by the Bank of England and investors, it is a shame that the ONS has had to delay the publication of its employment figures until today.

‘With low response rates to surveys and a new ‘experimental’ data series being used, today’s figures provide a somewhat clouded picture of what is happening in the labor market, at a point where we are a very finely balanced point in the rate hike cycle.

‘Looking at the ‘experimental’ data, we can see that unemployment in Britain remains stable for now.

‘However, the rapid rise in interest rates is starting to bite and we are seeing companies reducing workforces and in some cases cutting jobs, with employment rates falling and unemployment gradually rising over the past three months.

‘We know that economic growth in Britain is slowing and could potentially turn negative in the fourth quarter, so today’s data provides further evidence that things may be starting to turn around. This could be just enough for the Bank of England to continue with a pause at its next interest rate decision, after slamming on the brakes at its last meeting.

‘One thing is certain, however: Britain is potentially in uncertainty for some time – as are the current employment statistics. With the economy at a standstill, an election year approaching and geopolitical instability on the rise, things may get tougher before they get easier, even as inflation continues to fall.

‘For investors, times like these are when you have to hold your nerves and look forward to the opportunities that a troubled market often offers.’

Plus500 has maintained its annual profit outlook after reporting a 10 percent increase in quarterly core profit, buoyed by its long-term customers despite lower trading volumes.

The London-listed company’s core profit for the three months to the end of September was $80.3 million, compared with $73.2 million in the second quarter.

CEO David Zruia said:

‘I am pleased to announce that Plus500 continued to perform well during the third quarter of 2023, driven by our focus on higher value customer acquisition, geographic expansion and product innovation, despite lower volatility and trading volumes in global financial markets.

‘The Group continues to make good progress against its strategic plans with expansion into the US, Japan and UAE markets.

‘Our consistent high performance is enabled, supported and enhanced by our market-leading, proprietary technology that is fully developed and maintained by our highly experienced teams. As a diversified, global company with a clear and proven strategy, Plus500 is well positioned to continue to deliver strong results and attractive returns for its shareholders.”

A survey shows that most British manufacturers believe the country’s infrastructure has deteriorated over the past decade.

Consultancy RSM UK and industry body Make UK found that 68 percent of businesses believe the quality of the UK’s national infrastructure has declined over the past decade, while 57 percent say it has gotten worse at a local level.

Rail and road networks were viewed most negatively by manufacturers, with a significant minority also saying the country’s broadband had become poorer.

Britain’s unemployment rate was unchanged at 4.2 percent in the three months to August, new data from the Office for National Statistics shows.

Barclays’ profits fell slightly year-on-year in the third quarter as the strength of its US credit card business was offset by the weakness of its investment banking division.

CS Venkatakrishnan, Group CEO, said:

‘We see further opportunities to improve shareholder returns through cost efficiency and disciplined capital allocation within the Group.

“We will provide an Investor Update on the FY23 results, which will, among other things, outline our capital allocation priorities and revised financial targets.”