Axel Rudolph, senior technical analyst at online trading platform IG, said:

Pedro Goncalves writes:

The Bank of England (BoE) may need to keep higher interest rates for longer than markets are currently pricing in, as inflation could prove more persistent than anticipated, according to the central bank's chief economist.

Huw Pill warned that bringing inflation back to the BoE’s 2% target might be more challenging than expected. "[This could] mean that the response of monetary policy, to ensure that we get back to our target within a reasonable cycle, needs to be somewhat more aggressive or more persistent in itself,” he said, according to Reuters.

He warned the risk of second-round inflation effects, as well as concerns that the UK might be undergoing a structural shift in the way prices and wages are set. These developments could potentially lead to higher inflationary pressures in the medium term.

In a speech at the London School of Economics (LSE), Pill told investors not to take the BoE's latest forecast – suggesting inflation would return to target by early 2027 based on current market pricing – as an endorsement of future rate cuts. Pill made clear that the BoE’s forecast was not a signal for an imminent reduction in rates, as market expectations have indicated.

Read more on Yahoo Finance UK

The pound rose against the dollar (GBPUSD=X) on Tuesday, up 0.3% to $1.3208, supported by weakness in the greenback.

The US dollar index, (DX-Y.NYB), which measures the greenback against a basket of six currencies, dipped 0.3% to 101.53 at the time of writing, as optimism over the US-China tariff deal appeared to wane slightly.

Neil Wilson, UK investor strategist at Saxo Bank, said that "UK employment data shows cracks emerging, which supports a more dovish bias from the Bank of England (BoE)".

He added that the "BoE should not be hanging about and get in there with cuts, the inflation is not the problem now".

Meanwhile, data from the British Retail Consortium, also published on Tuesday, showed a 7% increase year-on-year in UK retail sales. That was up from a 4% decline recorded in April 2024 and was above average three-month growth of 2.9% and a 12-month average of 1.4%.

Derren Nathan, head of equity research at Hargreaves Lansdown, said: "This was boosted both by the favourable timing of Easter and the sunniest April on record. A more meaningful comparison looked at March and April combined.

"Here the trend still moved in the right direction but to the much smaller tune of 0.2% which is unlikely to offset the impact of higher wages and employers’ National Insurance contributions on profits."

Russ Mould, investment director at AJ Bell said:

Pedro Goncalves writes:

Shares of Coinbase (COIN) surged more than 10% in pre-market trading after the company confirmed it will join the S&P 500 index (^GSPC), replacing Discover Financial Services (DFS). The change will take effect before trading begins on May 19, with Discover set to be acquired by Capital One Financial (COF).

In order to be included in the benchmark index, a company must meet several criteria, including reporting a profit in its most recent quarter and having cumulative profits over the four most recent quarters. Coinbase (COIN), the largest cryptocurrency exchange in the United States, met these requirements with its latest financial report.

For the first quarter of 2025, Coinbase (COIN) posted a net income of $65.6m (£49.6m), or $0.24 per share, down significantly from $1.18bn, or $4.40 per share, during the same period last year. The decline was primarily due to fluctuations in the fair value of its cryptocurrency investments. However, revenue for the period rose by 24%, reaching $2.03bn compared to $1.64bn a year ago.

Since going public via a direct listing in 2021, Coinbase (COIN) has increasingly embedded itself into the broader US financial landscape. This expansion comes as bitcoin's (BTC-USD) value has skyrocketed, and as large institutional players have gained regulatory approval for spot bitcoin exchange-traded funds (ETFs). Last week, bitcoin (BTC-USD) prices surged past $100,000, nearing their all-time high set in January.

Retailer Marks & Spencer (MKS.L) said that the dates of birth and contact details of some customers has been stolen, as it grapples with a recent cyber attack on its systems.

Although some purchase data was taken, no usable card information or payment details were swiped, the company said.

The news comes three weeks after a huge disruption to the store's systems. Online orders are still suspended.

Read PA's report on M&S on Yahoo Finance.

China has stopped a ban on deliveries of Boeing (BA) aircraft following a agreement between China and the US which put a pause on sky high import and export tariffs, according to a Bloomberg report.

The report, which cited sources familiar, said officials in Beijing have said deliveries of the planes can resume.

In April, Boeing returned three jets to the US after its Chinese delivery centre rejected them. China also said it would potentially look to sell dozens of aircraft due to the tariffs.

Boeing stock was 1.9% higher in premarket trade following the report.

US stock futures traded down after markets roared on Monday following the announcement of a deal between the US and China to dramatically reduce tariffs for 90 days.

Futures attached to the Dow Jones Industrial Average (YM=F) inched 0.2% down, the tech-heavy Nasdaq 100 (NQ=F) slipped 0.4%, and the benchmark S&P 500 (ES=F) sunk 0.3%.

The temporary agreement slashes US tariffs on Chinese imports to 30% from 145%, and Chinese tariffs on US goods to 10% from 125%, effective Wednesday. During the 90 day pause, the countries have said they will try to negotiate a more long-lasting trade deal.

Progress between the two trading partners triggered a buying frenzy Monday, sending the indexes soaring and giving Big Tech stocks a sizable boost.

Paige Tao, economist at PwC UK, said:

Vicky McKeever writes:

UK pay growth slowed in the three months to March, with the jobs market also showing signs of cooling, amid heightened economic uncertainty.

Average regular earnings excluding bonuses rose 5.6% in the period on an annual basis, according to data from the Office for National Statistics (ONS). That was down from 5.9% in the three months to February, but still easily outstripped inflation, which fell to 2.6% in March.

Annual growth in real terms — adjusted for inflation — fell to 1.8%, compared with 2.1% in the previous quarter.

There were 761,000 job vacancies between February and April, according to estimates from the ONS, which was down 42,000 on the previous three months. This figure was 34,000 below the number of vacancies in January to March 2020.

Early estimates showed that the number of payrolled employees fell by 33,000 in April on the month and declined by 106,000 on the year, following an decrease of 63,000 in the year to March.

The unemployment rate came in at 4.5% in January to March, which was up from 4.4% in the previous quarter.

Read more on Yahoo Finance UK

This story dropped overnight:

A new agreement with Britain's biggest pension funds is set to unlock up to £50bn of investment for UK private firms and major infrastructure projects, the government announced on Tuesday.

The Treasury said that 17 workplace pension providers managing around 90% of active savers' defined contribution pensions will sign the Mansion House Accord at a roundtable in London with chancellor Rachel Reeves and minister for pensions Torsten Bell on Tuesday.

Signatories, which include Aviva (AV.L), Aegon (AGN.AS) and Legal & General (LGEN.L), will pledge to invest 10% of their workplace pension portfolios in assets that boost the economy such as infrastructure, property and private equity by 2030. The Treasury said that at least 5% of these portfolios will be ringfenced for the UK, which is expected to release £25bn directly into the UK economy by the end of the decade.

The Treasury said that the £50bn and £25bn cash estimates for unlocked investment are indicative and assume current private market investment levels stand at 3.5%, of which 40% is UK-based. In line with the accord, these would increase to 10% and 50% respectively by 2030.

Read more on Yahoo Finance UK

Hello from London. Lucy Harley-McKeown here, ready to bring you the markets and business news of the day. This morning we've already had data from the UK job market (more on that later). This morning the British Retail Consortium also published fresh data on sales.

We're looking ahead to the US inflation reading at 1.30pm UK time.

Key results for today come from Jaguar Land Rover maker Tata Motors (TATAMOTORS.NS).

Let's get to it.