London stocks were treading water by midday on Tuesday, flitting between small gains and losses as investors stuck to the sidelines ahead of the latest policy announcement from the Federal Reserve, but WPP shot higher on news of a government contract win.
The FTSE 100 was up 0.1% at 9,655.66.
Joshua Mahony, chief market analyst at Scope Markets, said: "Looking ahead, today brings a welcome batch of employment figures, with the delayed official jobs report meaning that the JOLTS job openings and weekly ADP payrolls data provide two rare key data points for the Fed to mull over.
"Market pricing for a December rate cut now lies at a convincing 89% according to the CME, thus putting additional interest on the pace of easing next year. With Job openings expected to fall further, additional weakness could put more pressure of the Fed to ease in Q1. However, while the S&P 500 managed to close within 1% of record highs yesterday, JP Morgan have warned that they see tomorrow's rate cut as a potential 'buy the rumour, sell the fact' situation."
On home turf, data released earlier by the British Retail Consortium and KPMG showed that retail sales growth slowed to its lowest in six months in November as cautiousness ahead of the Autumn Budget resulted in an underwhelming Black Friday promotional period.
Total retail sales increased at a year-on-year rate of 1.4% last month, down from 1.6% in October and 2.3% in September.
The slowdown came despite inflation remaining elevated, reflecting "pre-Budget jitters among shoppers", according to Helen Dickinson, chief executive of the BRC.
Food sales were up 3.0% over last year, slowing slightly from the 3.% year-on-year growth seen in October.
Meanwhile, non-food sales rose just 0.1%, in line with the previous month, with 0.5% growth online offsetting a 0.3% decline in-store.
"Not unexpectedly, online dominated, with the proportion of non-food bought online reaching its highest level since 2022. Many consumers took advantage of promotions, with homeware and upholstery selling well ahead of festive hosting. Fashion lagged, especially with the mild first half of November dampening demand for winterwear," Dickinson said.
Elsewhere, figures from Worldpanel showed that grocery inflation held steady at 4.7% in the four weeks to 30 November.
Worldpanel by Numerator said retailers were ramping up investment in promotions to encourage shoppers through their doors in the run-up to Christmas, with sales expected to exceed £13.6bn in December.
Fraser McKevitt, head of retail and consumer insight at Worldpanel, said: "Retailers are pulling out all the stops to win shoppers over as they gear up for one of the most important trading periods of the year. One in five households tell us that they've been struggling financially and that's been largely consistent over the past two years.
"With the cost of living still biting for many this Christmas, just under one third of all spending is on promotion as supermarkets find ways to shield shoppers from the impact of price rises."
In equity markets, WPP jumped to the top of the FTSE 100 after the advertising giant reportedly secured a major government contract worth around £2bn. According to The Times and trade magazine Campaign, WPP-owned agency Wavemaker has landed the four-year contract with the Cabinet Office following a competitive tender process.
Defence companies were in the black again, with BAE Systems and Babcock both up.
Online greeting card and gifts retailer Moonpig rallied as it backed its full-year expectations and posted a rise in first-half profit and revenue, pointing to continued momentum at the Moonpig brand and a return to growth at Greetz.
Man Group was boosted by an upgrade to 'overweight' from 'neutral' at JPMorgan.
British American Tobacco lost ground as it reaffirmed guidance, boosted by strong demand in the US, but said its 2026 performance was expected to be at the lower end of the range of its mid-term targets. It also announced plans to return £1.3bn to shareholders in the next financial year.
Defence group Chemring fell despite reporting a sharp jump in annual profit as governments increased military spending amid the growing threat from Russia and dwindling support from the US under the Trump administration.
Equipment rental firm Ashtead was little changed as it outlined plans to return $1.5bn to shareholders and reaffirmed its full-year outlook, despite a dip in interim profits.