The FTSE 100 closes higher Thursday, gaining 75.07 points, or 0.7%, to finish at 10,831.52, lifted by cooling bond yields, firmer UK services data, and a broad rally on Wall Street ahead of a closely watched US jobs report.
The purchasing managers’ index, or PMI, is a monthly survey of business activity in which any reading above 50 signals growth and below 50 signals contraction. Thursday’s session was shaped in large part by two sets of PMI data, one for the UK and one for the United States, both pointing to expansion.
UK services activity and the FTSE 100 closes higher Thursday
The seasonally adjusted S&P Global UK services PMI rose to 52.5 points in August, up from 52.1 in July, the highest reading since April. Although the final figure came in just below the initial flash estimate of 52.8, it remained comfortably in growth territory. New business increased for a second consecutive month, supported by signs of improving business and consumer spending and investment sentiment. Export sales, however, fell for a sixth successive month, weighed down by weak European demand and geopolitical uncertainty.
The S&P Global UK composite PMI, which combines services and manufacturing activity, also rose to 52.5 in August from 52.2 in July, matching the earlier flash estimate and reaching its highest level since April. According to Reuters, that composite reading beat expectations for a fall to 51.6, suggesting the economy is proving more resilient than forecasters had assumed. Reuters also reported that consumer confidence in August rose to its highest level since August 2024, the period shortly after the Labour government took office.
The PMI data followed earlier figures showing UK manufacturing activity reached a five-month low of 51.7 in August, down from 51.9 in July, though that reading came in above the flash estimate of 51.5.
Rob Wood, chief UK economist at Pantheon Macroeconomics, said the PMI data over July and August is consistent with quarter-to-quarter GDP growth of 0.2% in the third quarter, down from 0.4% in the second quarter, but still above the Monetary Policy Committee’s forecast for a rise of just 0.1%. He added that GDP growth has ‘consistently outperformed the PMI for the past year or two as uncertainty overly depresses the survey relative to actual output’.
Bond yields ease and Wall Street adds to the day’s gains
‘A measure of calm in government bond markets and a slight moderation in oil prices helped steady markets,’ said Russ Mould, investment director at AJ Bell. The yield on the US 10-year Treasury eased to 4.75% from 4.79% on Wednesday, while the 30-year fell to 5.23% from 5.27%. In the UK, the yield on 10-year gilts dropped to 5.16% from 5.24%, and the 30-year fell to 5.80% from 5.87%.
In New York, the Dow Jones Industrial Average rose 1.2%, the S&P 500 gained 1.0%, and the Nasdaq Composite climbed 1.3%. Two reports showed US service sector activity accelerated in August despite ongoing elevated prices. The headline S&P Global US services PMI posted 56.5 in August, up from 54.6 in July. The ISM services PMI registered 55.4, up from July’s 54.1 and ahead of the FXStreet consensus of 54.3.
The focus now turns to Friday’s US nonfarm payrolls report. Kathleen Brooks, research director at XTB, said the data could ‘seal the deal’ on a September rate rise from the US Federal Reserve. ‘There is already a 62% chance of a hike priced in, but a stronger than expected payrolls reading could see this rise even further,’ she said. Consensus figures cited by FXStreet expect the US to have added 58,000 jobs in August, after shedding 23,000 in July. US Federal Reserve governor Chris Waller told Reuters he would be prepared to vote for a rate rise at the central bank’s mid-September meeting if data showed inflation had accelerated.
The FTSE 250 ended up 172.07 points, 0.7%, at 24,496.13, and the AIM all-share closed up 9.80 points, 1.2%, at 799.81.
Among individual movers on the FTSE 100, Prudential rose 3.5% after Berenberg started coverage with a ‘buy’ rating. Endeavour Mining gained 3.6% and Fresnillo 2.9%, supported by a stronger gold price. Gold was quoted at $4,506.91 an ounce, up from $4,371.82 on Wednesday. WPP rose 5.6% after analysts at Bank of America said it is well placed to recapture business following reports that PepsiCo had picked Publicis for its global media account. BofA said Publicis ‘will now withdraw from Coca-Cola’s pitch, where it was facing incumbent WPP’, and added that WPP ‘is also well placed to recapture the US portion it lost to Publicis in 2025’. On the FTSE 250, Hilton Food jumped 12% after it raised full-year guidance, with adjusted pretax profit from continuing operations now expected in a range of £66 million to £71 million for 2026, up from the prior range of £60 million to £65 million.
Friday’s economic calendar includes the US jobs report, Canada unemployment data, eurozone retail figures, and a batch of construction PMI surveys, with the UK reading due at 09:30 BST.
