Hiring slows in Britain as salary growth accelerates in October

A survey, the results of which were published on Monday, showed that the British labor market witnessed a slowdown last October, with the pace of employment in permanent jobs declining for the first time in four months, while starting salaries for these jobs rose at a faster pace.

The monthly survey, conducted by the British Employment and Employment Authority, in cooperation with KPMG, showed a decline in hiring for permanent and temporary jobs, amid companies’ concerns about economic conditions and rising costs, according to Reuters.

John Holt, CEO of the group and senior partner of KPMG in Britain, said that companies will evaluate whether the measures announced in the budget provide them with sufficient stability to face external pressures and rising costs.

He added that the Bank of England's increase in interest rates, along with continued expectations of rising inflation in the coming months, may hinder the signs of improvement that have begun to appear in the labor market.

The index for permanent job appointments fell to 46.6 points in October, from 50.9 points in September, recording the lowest level since May. The temporary employment index also fell to 48.9 points, from 50.9 points, its first decline since March.

In contrast, the number of candidates available for permanent and temporary positions increased slightly, while permanent vacancies recorded the slowest pace of contraction since August 2024, compared to a limited increase in temporary positions.

The Bank of England raised interest rates by a quarter of a percentage point to 4 percent last week, warning that the continuation of the US-Iranian conflict may require at least one more increase. Investors expect interest rates to rise at least twice, by 25 basis points each, during 2027.

The survey included about 400 companies specialized in employment and labor consulting, and was conducted between October 12 and 26, before Finance Minister John Healey announced the budget on October 28, which made no significant change in growth or inflation expectations.

The Indian rupee continued to rise, on Monday, recording its highest level in six months, with traders anticipating the possibility of the Indian Central Bank intervening to buy the dollar, in light of its balancing between the need to enhance foreign exchange reserves and managing large forward selling positions for the dollar.

The rupee recorded 93.70 against the dollar during trading, continuing last week's gains that exceeded 1 percent. The currency rose by about 3.25 percent in about a month, after approaching its lowest levels ever, according to Reuters.

Madhavi Arora, of Emkay Global, expected that the Indian central bank would take advantage of any sustained improvement in dollar flows to rebuild its foreign exchange reserves, instead of allowing a sharp rise in the value of the rupee.

It said the central bank's large net debt positions in the futures market, along with India's ongoing needs to finance its current account deficit, would likely limit further gains for the currency.

Recovery support factors

Positive developments, coupled with measures taken by the Reserve Bank of India, helped support the rupee's recovery. The decline in crude oil prices eased pressure on the Indian currency, while foreign investors returned to pumping their investments into local stocks.

At the same time, the central bank's recent measures have helped address the persistent imbalance between supply and demand in the foreign exchange market, where importers' demand for dollars has been outstripping supply by exporters.

Bankers are currently wondering at what level might prompt the central bank to intervene to buy the dollar and limit the rise of the rupee.

Bankers point to two factors that may push the central bank to absorb part of the dollar supply: The first is a decline in India's foreign exchange reserves by about $68 billion from their peak, and the second is the size of the central bank's large exposure in the futures market.

The Indian central bank's net dollar position in the futures market rose to a record level of about $240 billion in September, leaving it with large future liabilities in the US currency to manage.

Copper prices rose on Monday, recovering from last week's losses, in light of continued concerns about supplies in China, the world's largest consumer of the metal, although the potential repercussions of the US midterm elections on tariffs and artificial intelligence infrastructure continue to put pressure on prices.

Standard three-month copper contracts on the London Metal Exchange increased by 0.81 percent to $13,880 per ton, while the most traded copper contract on the Shanghai Futures Exchange rose by 0.68 percent to 107,650 yuan ($16,124.93) per ton, by 03:30 GMT, according to Reuters.

In China, copper price premiums reached unprecedented record levels. The copper premium at Yangshan Port, which is an indicator of Chinese demand for imported copper, jumped to $215 per ton, while the local premium paid over Shanghai Futures Exchange contract prices reached 2,615 yuan.

In an additional indication of tight supplies, copper stocks monitored by the Shanghai Stock Exchange fell sharply to 33,848 tons last week, their lowest level since early January 2024, according to the latest inventory data issued by the exchange.

Analysts at the Chinese brokerage firm Everbright Futures said that copper prices may remain weak and move within a limited range, with external markets leading the decline, while low inventory levels and high premiums in the physical market in China could limit price losses.

For their part, Citi Bank analysts pointed out that the shortage of scrap and other raw materials has pushed copper stocks in China to levels approaching their lowest levels in several years, which sets the stage for strong purchases and restructuring of stocks when prices decline, if investor sales lead to a further decline.

On the other hand, the gains achieved by the Democrats in the US midterm elections raised concerns about tightening restrictions imposed on data centers in the United States, and the decline in the possibility of imposing customs duties that President Donald Trump intends to apply to refined copper, which threatens the demand related to artificial intelligence and the operations of storing the metal in anticipation of the duties, and these are two factors that supported prices during the last period.

Citi said that the decline in optimism about artificial intelligence may lead to an additional wave of selling in the copper market, while the decline in expectations regarding US tariffs is likely to lead to an increase in investors’ orientation towards less risky assets.

The bank added that the continued uncertainty over the duties may also put pressure on prices by increasing copper deliveries to LME warehouses, but an actual announcement of the imposition of duties may re-attract speculative buyers to the market.

Citi reduced its expectations for the price of copper during the next three months to $13,300 per ton, compared to its previous estimate of $14,500.

In other metal markets, aluminum rose on the London Metal Exchange by 0.65 percent, zinc by 1.10 percent, and lead by 0.27 percent, while nickel fell by 0.02 percent and tin by 0.28 percent.

On the Shanghai Stock Exchange, aluminum rose 0.58 percent, tin rose 0.65 percent, and nickel rose 0.45 percent, while zinc fell 0.22 percent and lead 0.16 percent.