The country’s unemployment rate fell to 3.8% in three months to December, compared to 4.2% in November, the Office National Statistics said. This is below expectations of 4.0%.

Wages excluding bonuses jumped by 6.2% compared with the same period a year earlier, which again is higher than the 6.0% expected.

Higher wages hint that inflation might not be as tamed as previously thought, while a tight job market shows that the economy is resilient and can withstand higher rates for longer - and rate cuts might not be needed in the short term. London shares fell this morning as a result. Investors are awaiting US inflation data later today to refine their timing expectations. The consensus anticipates a drop to 2.9% in January.

Yesterday, mining stocks outperformed on rising iron ore prices during the Lunar New Year holidays. The FTSE 100 ended the session flat.

In other news, the Governor of the Bank of England, Andrew Bailey, said on Monday that British banks might opt to maintain higher levels of reserves at the central bank than previously anticipated. This shift in reserve strategy could be a response to recent financial disturbances, he suggested during a speech about the stability of the UK banking sector. Bailey did not discuss future monetary policy.

In corporate news, Tui AG celebrated a record first-quarter with a narrowed pretax loss and increased revenue, while Ultimate Products reported a 4.1% decline in half-year revenue due to reduced supermarket orders. Kistos Holdings announced that the upgrade of the Joutun FPSO is 90% complete, with first oil expected by the end of Q4 2024.

Standard Chartered reportedly provided banking services to a Chinese company that traded with US-sanctioned Iranian firms, Arak Petrochemical and Bandar Imam Petrochemical. 

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