U.K. stocks saw a positive uptick on Thursday, buoyed by data indicating a slowdown in wage growth for the three months leading up to May. This development has sparked optimism about potential interest rate cuts ahead of the Bank of England's rate decision slated for next month.
Wage growth dipped below 6 percent for the first time in nearly two years, signaling a cooling labor market. Specifically, annual pay growth excluding bonuses averaged 5.7 percent from March to May, down from a previous 5.9 percent, as reported by the Office for National Statistics.
The unemployment rate remained stable at 4.4 percent for the period from March to May, consistent with the prior three months and in line with economists' predictions.
June saw payroll employment rise by 16,000 from the previous month, bringing the total to 30.4 million. The second quarter experienced a sequential decline in the number of vacancies by 30,000, reducing the total to 889,000.
Despite the promising wage data, Ashley Webb, an economist at Capital Economics, suggested that the first interest rate cut is likely to be in September rather than August. However, he acknowledged that it remains a close call.
The FTSE 100 benchmark index rose by 67 points, or 0.8 percent, to 8,254, following a 0.3 percent increase on Wednesday.
Energy sector stocks mirrored the climb in oil prices, with BP advancing by 1.5 percent and Shell by 1.3 percent.
3i Group, a private equity and infrastructure investment firm, reported an "encouraging start" to the new financial year, seeing its shares gain 1.4 percent. Meanwhile, Frasers Group experienced a near 9 percent surge after the fashion and retail giant set current fiscal year targets that surpassed market expectations.
