Nord Stream 2 certification suspended; Security probe into Nvidia’s Arm deal launched;– as it happened

Time to wrap up; here’s today’s main stories:

And finally, this sartorial shock...

Goodnight. GW

It’s been another wild day in the electric car world too.

First up, electric truck maker Rivian Automotive is now worth more than Volkswagen, after a five-day rally has seen its value double since last-week’s trading debut.

That’s astonishing, as Rivian is yet to record meaningful revenues, let alone profits.

As Bloomberg says:

Rivian, which is backed by Amazon and Ford, overtook Volkswagen’s market capitalization of $139 billion, as investors awash in cash and eager to get into the EV sector now have another stock to invest in, apart from industry trailblazer Tesla Inc.

“It is another sign that froth is creeping back into the marketplace,” said Matthew Maley, chief market strategist at Miller Tabak. “There is still an emergency level of liquidity flowing into the system long after the emergency has passed.”

Secondly, JPMorgan Chase has sued Tesla for $162m, claiming that the automaker failed to make a required payment that was triggered after chief executive Elon Musk’s 2018 announcement that he was considering taking the company private.

The case relates to warrants which Tesla sold to the bank in 2014, which give the right to buy a company’s stock at a set “strike” price and date.

The suit, filed in a Manhattan federal court, centers on a dispute over how JPMorgan re-priced its Tesla warrants as a result of Musk’s 2018 tweet that he was considering taking the carmaker private at $420 a share.

That tweet, and a later announcement that the transaction was off, both led JP Morgan to reprice the warrants, due to market movements in Tesla’s share price.

A spokesperson for JPMorgan said in a statement.

“We have provided Tesla multiple opportunities to fulfill its contractual obligations, so it is unfortunate that they have forced this issue into litigation,”

More here: JPMorgan sues Tesla for $162 mln over warrants, Musk tweets

Those tweets had already got Musk in hot water with the US Securities and Exchanges Commission, which charged him with securities fraud for misleading the market.

Musk settled the lawsuit, agreeing to step down as chairman and have the company’s lawyers pre-approve written communications, including tweets with material information about the company.

Europe’s stock markets ended the day at fresh record highs, despite the fresh uncertainty over gas supplies to the region.

The pan-European Stoxx 600 closed 0.2% higher, with Germany’s DAX and France’s CAC both at new peaks too.

Optimism over easing in U.S.-China tensions may have helped, after Xi Jinping and Joe Biden held a generally cordial cordial virtual summit (although Xi did warn Biden that China was prepared to take “decisive measures” if Taiwan makes any moves towards independence that cross Beijing’s red lines).

Corporate results also helped the mood, with Dutch technology investor Prosus up 4.2% after lifting its profit forecasts, and French luxury goods group Kering rallying 4.4% after its Gucci brand said it expected 2021 revenues will meet or exceed their pre-pandemic level.

European investors saw some solid growth data too, with confirmation that eurozone GDP rose by 2.2% in the third quarter of the year.

In the City, the FTSE 100 index has ended 25 points lower at 7327 points, down 0.35%, despite the strong unemployment data.

Cyber-defence firm DarkTrace led the fallers, down 4.3%, having been under pressure since the lock-up on insiders selling shares lifted earlier this month.

Pharmaceuticals giant AstraZeneca lost 4%, and accountancy software group Sage fell 2.7%.

Vodafone led the risers, up 4.8%, after raising its guidance and reporting a 5% rise in group revenues in the first half. The telco giant is also looking to maximise funding opportunities from the EU’s recovery fund.

Property companies Land Securities (+3.7%) and British Land (+3%) also rallied, after LandSec came back into profit as shoppers and office workers returned to cities.

Among smaller companies, the Restaurant Group (which owns Wagamamas and Frankie & Benny’s) surged almost 17% after lifting its profit guidance after outperforming the market since mid-September.

Danni Hewson, AJ Bell financial analyst, explains:

“The thing about those good jobs figures is that they restart the rate hike merry-go-round and that’s one ride investors have just jumped off. It’s one of the reasons London markets have had a pretty gloomy day despite positive outlooks from a number of market movers including Vodafone, Land Securities and noodle specialist the Restaurant Group.

Their brand of optimism just couldn’t quite cut through and it seems the investment roller coaster isn’t over for Cineworld which found itself back at the bottom of FTSE 250 losers, the Bond effect clearly licensed for just a couple of days. Is a rate rise a done deal for December? Not necessarily but an inflation update out tomorrow will lend more clarity, though it might seem prudent for the Bank of England to allow any Christmas effect to leach away before hitting the big red button.

Cryptocurrencies have had a bad day, as China intensified its crackdown on the sector.

Bitcoin has fallen by over 5% to around $60,542.40, away from the record highs of around $69,000 set last week.

Other popular crypto assets are also weak, with ether down 6.6% at $4,305 and solana shedding 7% to $224.

The selloff came after Chinese authorities ramped up their ongoing crackdown on crypto mining, calling it an “extremely harmful” practice that threatens to jeopardize the country’s efforts to reduce carbon emissions.

CNN has the details:

The National Development and Reform Commission spokesperson Meng Wei blasted bitcoin mining during a press conference Tuesday in Beijing.

She said that activity “consumes lots of energy” and “produces lots of carbon emissions.”

Meng said that the NDRC — the country’s top economic planner — will launch a “full-scale” clampdown on cryptocurrency mining by focusing on commercial mining and the role of state-owned businesses in the industry.

She also said that crypto production and trade produces “prominent risks,” and blasted the industry as “blind and disorderly.”

More here: Bitcoin falls as China takes aim once again at ‘extremely harmful’ crypto mining

Twitter’s chief financial officer, Ned Segal, also knocked sentiment after telling the Wall Street Journal that investing some of the company’s corporate cash in crypto assets such as bitcoin “doesn’t make sense right now”.

The WSJ says:

We [would] have to change our investment policy and choose to own assets that are more volatile,” Mr. Segal said, adding that the company prefers to hold less volatile assets such as securities on its balance sheet.

JP Morgan’s billionaire chief executive Jamie Dimon was allowed to skip Hong Kong’s strict 21-day hotel quarantine rules because he runs “a very huge bank” with “key business in Hong Kong”, the territory’s chief executive, Carrie Lam, said on Tuesday.

Dimon flew into Hong Kong on Monday on JP Morgan’s private jet, becoming the first Wall Street bank boss to visit the territory or mainland China since the pandemic began.

Questioned about why Dimon was allowed to enter the territory without complying with coronavirus rules, Lam said:

“The justification is related to economy, as this is a very huge bank with key business in Hong Kong. He needed to come and work for about a day in Hong Kong.

But there are restrictions, including restrictions over his itinerary, so the risk is completely manageable.”

More here:

Nvidia’s acquisition of UK chip designer Arm is turning into a long-running saga, says Matt Evans, partner at law firm DLA Piper.

And he thinks the parties now face a ‘mountain’ to climb, after the government announced an in-depth investigation that will last six months today:

The deal was announced over a year ago but has still not completed. Far from it. Today’s decision by the Secretary of State to refer the deal to the CMA for a Phase 2 review was inevitable after the CMA had identified a large number of concerns on competition grounds (seven) and indicated that the undertakings in lieu of a Phase 2 reference proposed by NVIDIA were inadequate.

That report landed on the Secretary of State’s desk almost four months ago, so the UK Government has certainly taken its time digesting that report and weighing up the national security implications of the deal. The Secretary of State’s thinking at this stage will likely make for unhappy reading for the merging parties.

“On the competition side of the deal, the CMA took matters out of the hands of the Secretary of State by identifying concerns. It cannot be overruled on those, unless there are national security justifications to do so. On the substantive competition issues alone, therefore, the deal could be in trouble, although there is some way to go yet and a lot of data and documents for the CMA to review in Phase 2. By way of context, the CMA is not afraid to act as the world’s antitrust policeman and has blocked or caused the abandonment of several global deals in recent history, even where its counterparts elsewhere have cleared those deals.

In addition, the security concerns flagged by DCMS Secretary of State Nadine Dorries could also sink the deal.

Evans explains:

“Perhaps more worrying for the parties, however, is the fact that far from thinking that there may be national security considerations in favour of the deal that outweigh the CMA’s antitrust concerns, the Secretary of State has identified five threats to UK national security that the deal raises. That raises the bar to ultimate clearance that NVIDIA faces in the Phase 2 review. The review typically will last 24 weeks from today, extendable by eight weeks, after which the CMA must report to the Secretary of State. The Secretary of State must then issue their decision – unconditional clearance, conditional clearance or prohibition – within 30 days of receipt of the CMA’s report.

“The Secretary of State faces a potentially tricky balancing act of safeguarding national security – and will have a much more hands on and interventionist role in this regard when the National Security and Investment Act comes into force on 4 January 2022 – and encouraging inward investment into the UK. All the more so following Brexit when the primary message to business is that the UK is open and welcoming to friendly investors. It is likely to be the middle of 2022 before the UK rules on whether NVIDIA/Arm may go ahead, by which time it is possible that a competition authority elsewhere has shot the deal down. For example, the European Commission opened an in depth Phase 2 competition review into the deal last month and has until mid-March to decide whether to clear it. Perhaps the prospect of the deal being blocked elsewhere, taking matters out of the UK’s hands, is something the Secretary of State is quietly hoping for. Regardless, the parties appear to have a mountain to climb to keep the deal alive.”

Two more UK energy suppliers have collapsed, affecting more than 35,000 UK domestic customers.

Energy regulator Ofgem has announced that Neon Reef, which has 30,000 customers, and Social Energy Supply, with 5,500, are both ceasing to trade.

The regulator says that the unprecedented increase in global gas prices has put financial pressure on suppliers [which will not be helped by today’s near 10% jump in wholesale gas prices].

Customers will be moved to a new supplier under Ofgem’s Supplier of Last Resort procedure, it says.

It means that 21 suppliers have collapsed since the start of September, when the surge in wholesale gas prices began to hurt suppliers. The UK’s energy price cap means that companies who haven’t hedged themselves cannot simply hike bills - although the cap is likely to rise sharply again next April.

Here’s Adam John of Utility Week’s take:

While the fall in UK unemployment in the latest labour force survey has been widely welcomed, the TUC was quick to point out that black and minority ethnic (BME) unemployment rates are coming down much more slowly than the rates for white workers.

Today’s figures show the rate has fallen by 0.2 percentage points for BME workers, compared to 0.7 percentage points for white workers.

Frances O’Grady, general secretary of the TUC, said:

“BME workers have borne the brunt of the pandemic. They’ve been more likely to be in low-paid, insecure work and have been put at greater risk from the virus

“Black workers have been at much higher risk of unemployment for every year on record. We cannot allow this inequality in our jobs market. Ministers must hold down unemployment, create good new jobs and challenge the discrimination that holds BME workers back.”

Here’s more reaction from the TUC:

After a bruising couple of weeks, the government was in need of some good news and that was provided by the latest jobless figures this morning, our economics editor Larry Elliott writes:

Fears that the end of the furlough scheme would lead to rising unemployment have proved groundless.

It is, of course, early days. There are still only flash estimates of what happened in October once the Treasury’s wage subsidies had come to an end but the signs are promising.

But rather than the expected surge in redundancies as firms had to cope without government financial support, there was a 160,000 rise in the number of payrolled employees. In the three months from August to October the number of job vacancies hit a new record of close to 1.2m – up almost 400,000 on the pre-pandemic level.

The Office for National Statistics said in the July to September period – the months leading up to the scrapping of the furlough – the number of people moving from job to job was higher than ever before, but this was the result of choice rather than people being forced to move because they had been dismissed.

Rishi Sunak said the figures were tribute to the “extraordinary success” of the furlough and few would dispute that claim. The unemployment rate fell by 0.5 percentage points to 4.3% in the three months to September and is only marginally higher than it was when Covid-19 arrived in early 2020....

More here:

The number of workers on UK company payrolls rose sharply last month despite the end of the government’s furlough scheme, after a record increase in people moving from unemployment into work ahead of its closure.

The Office for National Statistics (ONS) said Britain’s employers added 160,000 more workers to their payrolls in October, taking the total to 29.3million in the first month after the removal of the multibillion-pound wage subsidy scheme.

The headline unemployment rate fell by more than expected, dropping to 4.3% in the three months to the end of September, from 4.5% in August. However, it still remains above the pre-pandemic level of 4%.

It comes after the Bank of England held back from raising interest rates earlier this month while waiting to see what happened in the jobs market after the removal of furlough, confounding financial market expectations for the first rise in borrowing costs since the pandemic began.

Some analysts said the jobs figures could provide Threadneedle Street with a green light for raising interest rates before Christmas – if a similar picture is maintained in the next set of official labour market figures on 14 December.

More here.

Over in America, consumers are continuing to spend on goods, despite supply chain problems.

US retail and food services sales jumped by 1.7% in October, and were 16.3% higher than a year ago, as people continued to buy electronics, cars and homeware.

Spending at electronics & appliance stores rose by 3.8% during the month, while motor vehicles and parts spending rose 1.8% and spending at department stores rose by 2.2%.

Americans also spent more on gasoline, due to the surge in prices at the pumps.

Spending at gas stations rose 3.9% during the month, and was 46.8% higher than a year ago, reflecting the surge in fuel prices hitting motorists.

However, spending a food services & drinking places was flat month-on-month, while spending at clothes stores fell 0.7%.

Michael Pearce, senior US Economist at Capital Economics, says goods spending rebounding, but services still subdued:

The breakdown showed that was driven by a 4.0% rise in non-store sales and a 3.8% increase in electronics and appliance store sales. By contrast, spending at bars and restaurants was flat, despite the rapid easing of the Delta wave in the South. With case numbers in the rest of the country now on the rise again, the recovery in services spending in the months ahead is likely to remain muted.

The stronger rebound in goods spending is a positive sign for fourth quarter consumption growth, but the weakness of food services sales is a bad sign for the recovery in services consumption.

Back in the UK, the government has launched a full-blown investigation into Nvidia’s takeover of Cambridge chip designer Arm, on national security and competition grounds.

Digital secretary Nadine Dorries has ordered a Phase Two investigation into the $40bn sale of Arm, which is seen as the jewel in the crown of the British tech sector.

The in-depth inquiry will be carried out by the Competition and Markets Authority (“CMA”), following an early investigation which found significant competition concerns over the deal.

Dorries said:

I have carefully considered the Competition and Market Authority’s ‘Phase One’ report into NVIDIA’s proposed takeover of Arm and have decided to ask them to undertake a further in-depth ‘Phase Two’ investigation.

Arm has a unique place in the global technology supply chain and we must make sure the implications of this transaction are fully considered. The CMA will now report to me on competition and national security grounds and provide advice on the next steps.

The government’s commitment to our thriving tech sector is unwavering and we welcome foreign investment, but it is right that we fully consider the implications of this transaction.

Arm was taken over by Japanese technology conglomerate SoftBank in 2016, SoftBank agreed to sell Arm to US chip giant Nvidia in September 2020 for $40bn.

Arm’s chip designs are used in tens of billions of chips worldwide, in devices such as smartphones, smart devices and sensors, and traces its history back to the Acorn Archimedes PC created in the 1980s.

Having gathered evidence gathered from departments, Dorries has decided that the national security implications of the deal should be subject to further investigation.

The government explains:

While not all individual devices relying on Arm-based chips are necessarily classed as ‘critical’ in themselves, the security and resilience of the broader supply chain is important for UK national security.

The CMA’s Phase One investigation into the deal (online here) found that it could lead to a substantial lessening of competition in the supply of CPUs, interconnect products, GPUs (graphics chips) and SoCs (system-on-chips) across four key markets: data centres, Internet of Things, automotive and gaming.

The report says:

After careful examination, the CMA found significant competition concerns associated with the merged business’ ability and incentive to harm the competitiveness of NVIDIA’s rivals (that is, to ‘foreclose’) by restricting access to Arm’s CPU IP and impairing interoperability between related 2 products, so as to benefit NVIDIA’s downstream activities and increase its profits.

Nvidia has previously defended its plans for Arm, pledging to maintain the British chipmaker’s neutral licensing model.

But, the CMA’s report warns that there would be incentives to restrict access to Arm’s intellectual property, to benefit Nvidia:

With regard to the Merged Entity’s incentives, the evidence indicates that the benefits of foreclosure are likely to outweigh the costs of such strategy.

The CMA believes that the Merger may create incentives to change Arm’s business model to favour NVIDIA and notes the rapid growth of the addressable Datacentre CPU and SmartNIC markets specifically.

Here’s the Telegraph’s James Titcomb:

he chief executive of Trafigura, one of the world’s biggest commodity traders, warned earlier today that Europe risks rolling power outages if there is a prolonged period of cold weather this winter.

Speaking at the FT Commodities Asia Summit, Jeremy Weir said there was still insufficient natural gas in the region despite the promise of increased flows from Russia.

Weir warned that a cold winter could lead to rolling outages, if supplies couldn’t meet demand., saying:

“We haven’t got enough gas at the moment, quite frankly. We’re not storing for the winter period.

So hence there’s a real concern that there’s a potential if we have a cold winter that we could have rolling blackouts in Europe.”

More here: Trafigura chief warns of rolling power outages in Europe this winter

Weir was speaking before the Nord Stream 2 certification suspension was announced, and his comments underline the concerns over supplies of energy this winter.

Gas prices have jumped, after Germany’s energy regulator temporarily suspended the certification of Russia’s controversial Nord Stream 2 gas pipeline.

It has ruled that the Swiss-based consortium needs to form a company under German law to secure an operating licence, before certification to pump gas from Russia to Europe could be considered.

The ruling is another setback to the Kremlin-backed gas project, and could increase concerns that Europe could run short of gas this winter, as cold weather drives up demand.

Nord Stream 2 runs under the Baltic Sea, bypassing Ukraine, so would deprive Kiev of significant revenues from pipelines that currently carry gas by land from Russia to the West.

The US has opposed the project, warning it is a Russian geopolitical project intended to divide Europe and weaken European energy security.

Nord Stream 2 needs regulatory approval before it can start to transport gas.

And today, the regulator, the Bundesnetzagentur, said:

The Bundesnetzagentur has today suspended the procedure to certify Nord Stream 2 AG as an independent transmission operator.

Following a thorough examination of the documentation, the Bundesnetzagentur concluded that it would only be possible to certify an operator of the Nord Stream 2 pipeline if that operator was organised in a legal form under German law.

Nord Stream 2 AG has decided to set up a subsidiary under German law solely to govern the German part of the pipeline, the regulator said in its statement.

So, the certification procedure will remain suspended until “the main assets and human resources” have been transferred to the subsidiary, which must then meet Germany’s requirements of an independent transmission operator.

Reuters has more details:

Nord Stream 2 said it had been notified by the regulator but added: “We are not in the position to comment on the details of the procedure, it’s possible duration and impacts on the timing of the start of the pipeline operations.”

Ukrainian gas companies Naftogaz and GTSOU were given notice on Monday that they would be included in the German certification procedure of the pipeline.

Ukraine opposes the pipeline and will lose revenues if gas from Russia bypasses pipelines on Ukrainian territory. The head of the Ukrainian energy firm Naftogaz welcomed the German regulator’s decision to suspend certification.

The regulator also said the Berlin economy ministry and the European Commission had been made aware of its notice to Nord Stream 2. The Commission has two months after the German regulator’s decision to assess the application for its part.

The price of next-day gas in the UK has jumped by 7.6% to 218p per therm, a one-month high. Gas for December delivery to the UK is up 9%.

European gas prices have also jumped, with the benchmark Dutch front-month contract up almost 8%.

Last night, UK prime minister Boris Johnson urged European nations to break their addiction to Russian gas.

In a speech to City of London dignitaries at Mansion House, Johnson said Germany would have to choose between “mainlining ever more Russian hydrocarbons” and “sticking up for” peace and stability in the east.

“So when we say that we support the sovereignty and integrity of Ukraine, that is not because we want to be adversarial to Russia, or that we want in some way strategically to encircle or undermine that great country,

“We hope that our friends may recognise that a choice is shortly coming between mainlining ever more Russian hydrocarbons in giant new pipelines, and sticking up for Ukraine and championing the cause of peace and stability.”

The end of the furlough scheme in October has not sparked fresh a labour market shock as many had feared, says the Resolution Foundation.

They point out that employment was rising and unemployment was falling as the scheme ended, with a record number of people moving into new jobs (see here)

The early signs for the UK’s post-furlough labour market are encouraging too, with payrolled employment rising by 160,000 in October and vacancy levels hitting a record 1.17 million.

But, Resolution also warns that pay could be a problem, as inflation threatens to rise faster than wages.

Nye Cominetti, Senior Economist at the Resolution Foundation, said:

“The furlough scheme has kept a lid on unemployment throughout the pandemic but many have feared that its closure on 30 September would spark a fresh labour market shock.

“But early indications are that the UK’s jobs market has remained resilient, with record vacancies and job moves, and withstood the withdrawal of emergency support well.

“But while unemployment is unlikely to be a problem this winter, pay may well be. The economy needs ‘goldilocks’ pay growth – fast enough to protect living standards, but not so fast as to generate excessive inflation.”

They’ve written a handy thread on the jobs data:

The pound has rallied as this morning’s jobs report bolsters the prospect of a rise in UK interest rates.

Sterling has gained almost half a cent to $1.346, its highest level in nearly a week.

Victoria Scholar, head of investment at interactive investor, explains:

We are seeing the number of employees on companies’ books at a record high, despite the end of the furlough scheme while job vacancies are also at all-time highs. On the plus side, there are plenty of job opportunities, which are set to rise in the run up to festive season, very low redundancy levels and the headline unemployment figure on a downward trajectory.

However the downside is that there are not enough workers, with fewer overseas job-seekers after the pandemic, skills shortages and supply is struggling to keep up with demand amid a faster-than-expected post-covid recovery. The tighter labour market is contributing towards an unsettling inflationary environment.

By holding off from raising rates this month, it was clear the Bank of England wanted to see more data before jumping the gun with today’s employment figures helping to paint a clearer picture. Wages saw the smallest gain in five months but were still above expectations, pointing to ongoing price pressures. The central bank governor Andrew Bailey sounded his concerns just yesterday about the tightness of the labour market, which today’s data largely appears to confirm.

The pound enjoyed a boost, thanks to the headline unemployment figure, which fell to 4.3%, just 0.3 percentage points above pre-pandemic levels, and ahead of analysts’ expectations, raising expectations of a rate hike sooner rather than later. GBPUSD has pushed back above $1.345, going against the downtrend that has been in play since the June peak, with losses having accelerated in recent weeks.

Estimating pay growth during the pandemic is difficult -- but earnings growth does seem to have cooled.

The ONS reports that total pay grew by 5.8% per year in July-September, down from 7.2% a month earlier.

Regular pay, excluding bonuses, rose by 4.9%, down from 6.0% in June-August.

Average total pay growth for the private sector was 6.6% in July to September, sharply ahead of the public sector where it was 2.4%.

But...these figures have been distorted by the impact of falling wages early in the pandemic, and by the loss of more low-paid jobs as sectors such as hospitality were hit hardest (which lifts average pay levels).

The ONS estimates that underlying regular pay growth could be as low as 3.4%, but says that this should be interpreted with caution given the uncertainty.

If pay growth is just 3.4%, then that’s barely ahead of September’s CPI inflation rate of 3.1%. Inflation is forecast to have jumped to around 3.9% in October (we find out tomorrow morning....).

And with inflation likely to hit 5% next April, it suggests workers could face a real wage squeeze, rather than the ‘high-wage’ economy promised by the PM.

TUC General Secretary Frances O’Grady says:

“The furlough scheme is a union success story, and it’s good news that so far, the wind down of the scheme has not been accompanied by job losses.

“But if ministers are serious about a high wage economy, they have work to do. The last 12 years have been the worst period for wage growth since Napoleonic times.

“And today’s figures suggest workers will be waiting for some time for the pay surge the prime minister promised at the Conservative party conference. Real pay is less than £2 a week above the pre-2008 financial crisis peak.

At just 4.3%, the UK’s unemployment rate is much lower than economists feared early in the pandemic.

Rushi Sunak, the chancellor of the exchequer, says it shows the success of the job retention scheme introduced back in spring 2020, which guaranteed most of the wages of workers temporarily sidelined.

“Today’s numbers are testament to the extraordinary success of the furlough scheme and welcome evidence that our Plan for Jobs has worked.

“We know how vital keeping people in good jobs is, both for them and for our economy – which is why it’s fantastic to see the unemployment rate falling for 9 months in a row and record numbers of people moving into employment.

“Our Plan for Jobs is at the heart of our vision for a stronger economy for the British people, with schemes like Kickstart and Sector Based Work Academies continuing to create opportunities for people up and down the country.”

The drop in unemployment also reflects the extraordinary success of the Covid-19 vaccines, swiftly developed and rolled out, which have allowed companies to reopen and take on more staff.

The jobs report also shows that workers switched jobs at a record pace over the summer.

The increase in employment in July-September was driven by a record high net flow from unemployment to employment, the ONS reports.

Total job-to-job moves also increased to a record high of 979,000, “largely driven by resignations rather than dismissals”, during the quarter, explains.

That could be a sign that more workers are choosing to change jobs - perhaps attracted by higher wages, or keen for a fresh start after the pandemic. Or that the backlog in job moves caused by Covid-19 is clearing.

The ONS also reports that the number of people in part-time work rose during the July-September quarter.

There was also a rise in the number of people on zero-hour contracts, driven by young people.

Hers are full details of the record vacancies at UK firms:

• The number of job vacancies in August to October 2021 continued to rise to a new record of 1,172,000, an increase of 388,000 from the pre-coronavirus (COVID-19) pandemic January to March 2020 level, with 15 of the 18 industry sectors showing record highs.
  
  
• On the quarter, the rate of growth in vacancies continued to slow down; in August to October 2021 vacancies rose 222,000 (23.4%), down from 288,000 (43.4%) last quarter, and the largest quarterly increase was seen in “wholesale and retail trade; repair of motor vehicles and motorcycles” up 29,600 (24.8%).
  
  
• In August to October 2021 all industry sectors were above their January to March 2020 pre-coronavirus pandemic levels, with accommodation and food service activities increasing the most by 66,500 (79%).

The ONS also points out that the ratio of unemployed people to vacancies hit a record low of 1.3 in July-September, showing a very tight labour market.

And although the growth rate slowed in the quarter, all industries increased their vacancy numbers on the quarter.

The fastest rates of growth in vacancies compared with last quarter were seen in construction (41.1%) and transport and storage (40.4%) (where supply chains have been struggling due to a lack of qualified lorry drivers).

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Unemployment across the UK has fallen again, as companies continue to add workers to their payrolls despite the end of the furlough scheme in September.

The UK’s jobless rate fell to 4.3% in the three months to September, new data from the Office for National Statistics shows, with the unemployment total dropping by around 152,000 compared to the previous quarter, to 1.448m.

That’s down from 4.5% a month ago, as firms continue to recruit as they recover from the economic shock of Covid-19 -- although it’s still higher than before the pandemic.

In September alone, the unemployment rate is estimated to have dropped to just 3.9%.

The furlough job-protection scheme ended on 30th September, and today’s report shows that companies continued to expand their workforces last month.

The ONS estimates that there were 29.3 million employees on company payrolls in October, an increase of 160,000 compared with September.

The ONS says:

It is possible that those made redundant at the end of the furlough scheme will be included in the RTI data for a few further months, while they work out their notice period.

However, responses to our business survey suggest that the numbers made redundant was likely to be a small share of those still on furlough at the end of September 2021.

The number of people in work also rose, by around 247,000 to 32.523m, lifting the employment rate to 75.4%.

The ONS explains:

July to September 2021 estimates show a continuing recovery in the labour market, with a quarterly increase in the employment rate, while the unemployment rate decreased, and the economic inactivity rate was largely unchanged.

Total hours worked increased, following the the relaxation of many coronavirus (COVID-19) restrictions. But the UK economic inactivity rate was estimated at 21.1%, 0.9 percentage points higher than before the pandemic, but largely unchanged on the quarter.

Vacancies at UK companies hit a record level too in August to October, rising to 1,172,000.

That’s an increase of 388,000 from the pre-coronavirus (COVID-19) pandemic January to March 2020 level, with 15 of the 18 industry sectors showing record highs.

Yesterday, the Bank of England governor Andrew Bailey told MPs he was “very uneasy” about the rising cost of living, but wanted to see post-furlough employment data before voting to raise interest rates.

This jobs data could encourage some Bank policymakers to consider a rate rise at the next meeting, in December....

It looks like a quiet start to trading in the markets, with the UK’s FTSE 100 seen a little lower, and European indices near last night’s record highs.

The latest monthly oil market report, updated eurozone growth figures, and new US retail sales figures could give new insights into the economic picture.

Michael Hewson of CMC Markets says:

Retail sales numbers in the US have been quite difficult to predict in recent months, with consumer confidence coming under pressure, due to rising prices in the shops and at the fuel pumps. In September US retail sales came in better than expected, rising 0.7%, against a forecast of -0.2%, while the August numbers were revised up to 0.9%. These better-than-forecasted numbers, along with the continued improvement in the US labour market helped convince the Federal Reserve that the economy was strong enough for it to proceed with its plans to start tapering its monthly asset purchase program starting this month.

It is certainly true that the US consumer has been more resilient than consumer confidence numbers might suggest in recent months. We’ve come off two successive monthly gains since the -1.8% decline seen in July, and today’s October numbers are expected to see another gain of 1.3%. While this might chime with how well a lot of US retailers have been doing this past quarter, it is completely at odds with the direction of recent consumer confidence data, which has been weak.

The agenda

• 7am GMT: UK unemployment report
• 9am GMT: IEA monthly oil market report
• 10am GMT: Eurozone third-quarter GDP (second estimate)
• 1.30pm GMT: US retail sales for October
• 2.15pm GMT: US industrial production for October
• 3pm GMT: House of Lords economic affairs committee hearing on Central Bank Digital Currencies