European markets pushed higher again on Friday, with London’s FTSE 100 smashing another record high at the open, yet the celebratory mood on the trading floor masks a deeply troubling economic reality unfolding on the city’s streets.
While stocks climb, a severe contraction in the capital’s job market is flashing red, creating a stark and unsettling tale of two Londons.
The benchmark FTSE 100 index jumped around 0.4% at the start of trading, with the pound firming 0.2% against the dollar to trade above $1.35.
The optimism is widespread, with futures tied to the pan-European Stoxx 50, Germany’s DAX, and France’s CAC 40 all pointing to gains of around 0.6%, as investors await the outcome of a highly anticipated meeting between US President Donald Trump and his Russian counterpart Vladimir Putin, hoping for a resolution to the war in Ukraine.
A city of contrasts: record stocks, collapsing jobs
But beneath the headline stock market gains, a chilling economic story is emerging. According to new data from the jobs website Indeed, advertisements for retail and hospitality positions in the capital have plunged by nearly 40% since October.
This is a far steeper decline than the national averages of 26% and 9% respectively, signaling a crisis disproportionately affecting London.
Tax data reinforces this alarming trend, showing that a staggering one in four of all UK job losses since October has occurred in the capital.
This economic pain is being attributed to a toxic cocktail of factors: the government’s recent increase in payroll tax and the minimum wage, the capital’s already high salary base, and the creeping advance of AI, which is beginning to replace roles in finance, marketing, and management consulting.
Corporate headwinds and the China problem
The underlying economic fragility is not just a London phenomenon; it’s being reflected in the earnings reports of major European brands with global exposure.
Danish jewelry giant Pandora on Friday posted a slightly weaker-than-expected rise in second-quarter sales, shining a spotlight on the continued weakness in the crucial Chinese market.
Revenues rose 8% on an organic basis to 7.08 billion Danish kroner ($1.10 billion), just missing the 7.12 billion kroner forecast by LSEG analysts.
The report revealed a sharp geographical divide: while the US market accelerated with 12% growth, sales in China recorded the largest decline, plummeting by 15%.
Pandora said its performance in China “continues to be challenged” and announced it would double its anticipated store closures in the country to 100 this year.
In a show of resilience, the company maintained its full-year outlook, but the report serves as a potent reminder that even as stock indices hit new highs, real-world economic and geopolitical challenges are casting a long shadow.
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