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LONDON MARKETS : FTSE 100 Stays Under Pressure, But Pound Drops After U.K. Jobs Data

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09/13/2017 | 11:07am CEST

By Carla Mozee, MarketWatch

Wage growth not as strong as anticipated

U.K. stocks dropped broadly Wednesday, even as the pound lost its grip slightly after a downbeat labor-market update.

Sterling dropped below $1.33 after the release of unemployment and wages figures, having traded around its highest level in a year against the U.S. dollar earlier in the session.

The FTSE 100 index was down 0.6% to 7,357.61, with less than 20 components moving higher. On Tuesday, the benchmark shed 0.2% , after a report showed inflation rising to 2.9% .

Economic data: The Office for National Statistics said Wednesday that wage growth in the three months to July rose 2.1%, including and excluding bonuses. That missed expectations for growth of 2.3% for pay with bonuses and 2.2% without, from a FactSet poll of analysts.

The unemployment rate for the period fell to 4.3% from 4.4%.

The pound stepped back after the data release, buying $1.3281. Earlier Wednesday it hit an intraday high of $1.3329, compared with $1.3284 late Tuesday in New York.

The Bank of England, led by Governor Mark Carney, is slated to release an update on monetary policy Thursday. The central bank is expected leave the key interest rate at 0.5%.

Pound pressure: But sterling's strength in recent sessions was still weighing on shares of U.K.-listed multinational companies, whose revenue and earnings prospect are squeezed if the pound rises.

Among them, shares in Johnnie Walker whisky maker Diageo PLC (>> Diageo plc) lost 1.4%. InterContinental Hotels Group PLC (>> InterContinental Hotels Group PLC) lost 1.2% and drug maker GlaxoSmithKline PLC (>> GlaxoSmithKline) gave up 1.1%.

Stock movers: Shares of EasyJet PLC (>> EasyJet) were among the FTSE 100's few advancers, adding 1.2%. The airline will start offering connecting services to long-haul carriers flying to the U.S. and other destinations, expanding the network of cities international passengers can reach on a single ticket.

Other gainers included British Airways parent International Consolidated Airlines Group (>> International Consolidated Airlines Group), up 0.8% and retailer Next PLC (>> Next) up by 0.4%.

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