- UK wage growth slightly weaker than expected
- Persimmon falls on flagging subdued market conditions
- FTSE 100 up 0.8%, FTSE 250 adds 0.2%
March 12 (Reuters) - UK shares advanced on Tuesday, buoyed by a slip in the pound and bond yields as slowing domestic wage growth boosted hopes that the Bank of England may begin monetary policy easing this year.
The blue-chip FTSE 100 rose 0.8% and hit its highest level since Feb. 20, as of 0915 GMT.
Data showed British wages excluding bonuses grew at their slowest pace since October 2022 during the three months to the end of January, while the unemployment rate edged up unexpectedly.
The yield on the benchmark 10-year gilt fell after the data, last at 3.941%, while the pound slipped 0.2%, propping up equities.
"When you start to see anything which suggests unemployment is ticking up, that does have a marginal impact (on equities)," said Danni Hewson, head of financial analysis at AJ Bell.
"But investors are not wanting to get too caught up ... the bigger move is likely to be seen when we get inflation numbers from the States."
The U.S. consumer prices is due later in the day, which could further give insights into the Federal Reserve's interest rate outlook and potentially set the tone for global central banks.
Money markets are now pricing in around 75 basis points (bps) of rate cut from the BoE, up from around 67 bps a day earlier. 0#BOEWATCH
Life insurers and rate-sensitive lenders led sectoral advances, up around 1.8% each, while homebuilders underperformed, dragged by Persimmon dropping 3.6%, after the homebuilder warned of subdued market conditions throughout this year.
The FTSE 250 edged 0.2% higher, led by a 10.3% surge in TP ICAP, after the broker said it was exploring options for its high-margin data unit Parameta, including the potential listing of a minority stake.
Gains on the mid-cap index were limited by Domino's Pizza Group slumping 11.1%, on forecasting lower first-quarter orders and like-for-like sales growth.
Reporting by Shristi Achar A in Bengaluru; Editing by Rashmi Aich
Source: Reuters