FTSE 100: Index Jumps Over 1%, UK Unemployment Rises; Vofafone Shares Rally

London’s FTSE 100 jumped about 1.1% on Tuesday, extending Monday’s and the year-to-date advance and setting a new intraday record, as investors weighed weak employment data against rising hopes for a Bank of England rate cut next month.

The index’s rally is being led by Vodafone, which has surged more than 4% after the telecoms group raised its full-year guidance and forecast its first annual dividend increase since 2018.

The upbeat outlook lifted sentiment across the blue-chip index, helping to offset concerns about slowing economic momentum.

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Other notable gainers included advertising giant WPP, up 3.1%, pharmaceutical group AstraZeneca, which rose 2.2%, and British American Tobacco, gaining 2.1%.

On the downside, Croda International slipped 3.1%, Auto Trader fell 2.3%, and Beazley edged 0.5% lower.

Sterling has weakened around 0.4% to $1.3127 after data showed the U.K. unemployment rate rose more than expected to 5% in September, the highest level since 2021. 

The increase from 4.8% a month earlier exceeded economists’ forecasts for a modest uptick to 4.9%, bolstering market expectations that the Bank of England could deliver a rate cut in December.

While the jobless data pointed to easing pressure in the labour market, the prospect of lower borrowing costs appeared to boost investor sentiment toward equities. 

AskTraders Takeaway: The FTSE 100’s advance reflected renewed optimism that monetary easing could help sustain the index’s strong performance into year-end.