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UK Shares Close Flat Amid Softer Labor Market Data; IG Group Soars

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London's FTSE 100 edged up 0.07% on Tuesday's closing as investors assessed Britain's cooling labor market data and the possibility of future Bank of England interest rate cuts.

The unemployment rate edged up to 5% in the three months to March 2026, against market expectations that the jobless rate would align with 4.9% in the quarter to February 2026. Meanwhile, regular pay in the UK, excluding bonuses, gained 3.4% year over year in the quarter to March 2026 to 693 pounds sterling per week, representing the smallest pickup since the three months to October 2020.

"The latest UK jobs report, which features rising unemployment, sharply lower payrolls and tumbling wage growth, is a reminder that the economy is much less susceptible to 'second round' effects from the incoming energy shock. We're still forecasting a rate hike in June, but that is far from guaranteed," economic and financial analysis publication ING said, adding that a lot will also depend on the inflation report due Wednesday.

In corporate news, IG Group (IGG.L) climbed 10.53% to the top of the blue-chip index after upgrading its 2026 forecast for organic total revenue growth to between 10% and 15%. The British derivatives trading company's first-quarter revenue grew to 339.9 million pounds sterling from 280 million pounds a year ago.

Diploma (DPLM.L) also raised its expectations for fiscal 2026 after attributable profit and revenue for the first half ended March 31 rose year over year. The British distribution group, which closed 3.17% higher, declared a higher interim dividend.

"The recently upgraded FY guidance is upgraded again with DPLM now expecting FY organic growth of 12% (vs 9% previously), Acquisitions to date to add 6% to growth (vs 3% previously) with EBITA margins of c.25% (as previously). This should translate into EBITA growth of over 30% and DPLM believes it is a 6% upgrade to consensus. Overall, continued excellent execution and momentum in the existing business and scope for further M&A, although clearly the stock has had a strong run YTD," RBC Capital Markets said.

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