Economic Growth

Election boosts UK stock market, and other economics stories to read this week

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Residence of the British Prime Minister, Downing Street, London.

UK stocks and the pound were trading up following the result of the UK election. Image: Unsplash/Nick Kane

Kate Whiting
Senior Writer, Forum Agenda
  • This weekly round-up brings you the latest news from the world of economics and finance.
  • Top economy stories: UK election boost to markets; US job growth slows; Japanese stocks buoyed by tech demand.

1. UK election boosts markets

A Labour Party election landslide victory gave UK stock markets a bump on 5 July.

UK stocks and the pound were trading up following the result of the election in which the ruling Conservative Party suffer its worst defeat in history.

The FTSE 250 midcap index was up 1.8% in early trading to its highest since April 2022, while shares in housebuilding companies were the big winners on the FTSE 100, up 2.3%, as Labour pledges to speed up home building.

"A landslide victory provides the sort of clarity and stability that equity markets need in an increasingly volatile world," Ben Ritchie, head of developed market equities at Abrdn, told Reuters.

The incoming Labour government has its work cut out to bring back growth to the economy, amid a high tax burden, high debt levels and stagnating living standards.

The UK's slow recovery from the COVID pandemic.
Growth in the UK has flatlined since the pandemic. Image: Reuters

2. US job growth slows moderately in June

In June, US job growth slowed slightly, while the unemployment rate rose from 4% to 4.1%.

The Labor Department's 5 July employment report also revealed that annual wage growth is at its slowest rate in three years.

Together with a moderation in prices in May, the data confirms the trend towards lower inflation is resuming after a surge in the first quarter – increasing the likelihood that the Federal Reserve can control inflation without causing a recession.

Initial claims for US unemployment benefits rose in the last week of June, while the number of individuals on jobless rolls rose to a two-and-a-half-year high, suggesting a slowdown in the labour market.

3. News in brief: Stories on the economy from around the world

Japanese stocks were boosted in the week ending 28 June as cross-border investors bought stocks worth a net 604.93 billion yen, marking their largest weekly net purchase since 12 April. AI and technology companies saw the highest demand.

Household spending in Japan fell unexpectedly in May due to higher prices impacting consumers' purchasing power.

In May, German industrial orders declined unexpectedly for the fifth month in a row. The federal statistics office reported a 1.6% decrease in orders from the previous month.

Last month, there was a significant slowdown in overall business growth across the Eurozone. Despite a strong expansion in the services industry, manufacturing continued to worsen, according to HCOB's composite Purchasing Managers' Index.

South Korea's factory activity growth accelerated to the fastest pace in 26 months in June, driven by a significant increase in new orders due to improving global demand.

Canada reported a trade deficit of C$1.93 billion ($1.41 billion) in May, larger than expected and the third consecutive monthly shortfall. Exports dropped by 2.6% to the lowest level in 10 months, while imports also decreased by 1.6%, according to Statistics Canada.


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1. UK election boosts markets2. US job growth slows moderately in June3. News in brief: Stories on the economy from around the world4. More on finance and the economy from our blog

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