Traders have ramped up bets that the Bank of England will cut interest rates next month after official figures showed unemployment hit a four-year high of 5pc.

Money markets put the probability of a December reduction in borrowing costs at 87pc after the Office for National Statistics warned Britain’s jobs market was “weakening”.

The unemployment rate hit its highest level since 2021 in the three months to September, although outside the pandemic it is at its highest level since 2016. The total number of people seeking work climbed to a five-year high of 1.79m, levels last seen when Britain was in Covid lockdown.

At the same time, pay growth in the public sector soared to a two-year high of 6.6pc, while private sector pay growth slumped to 4.2pc, its weakest since early 2021.

The pound fell and the FTSE 100 hit a new record high as traders increased bets that the Bank of England would cut interest rates to support the jobs market.

Thomas Pugh, chief economist at RSM UK, said the “further slowing in private sector pay growth throws the door wide open to a December rate cut – as long as the Budget is as deflationary as the Chancellor hinted at last week”.

The change in rate expectations sent the cost of short-term government borrowing down to its lowest level in more than a year. The yield on two-year UK gilts – bonds which are sensitive to the outlook for rates – fell by seven basis points to 3.73pc.

Traders also began to favour the chances that the Bank of England will cut rates three times by September next year. They had previously bet on just two more reductions in the Bank Rate, which sits at 4pc.

Wall Street giant JP Morgan said it was now forecasting three cuts in December, March and June, compared to two before the latest jobs figures.

Modupe Adegbembo, an economist at Jefferies, said: “Markets still underestimate the depth of the Bank’s potential easing cycle.”

She added: “Given the weakness in the labour market and the additional fiscal tightening likely to be delivered by the Chancellor, we expect the Bank of England to bring the Bank Rate down to around 3pc.”

06:55pm

British stocks closed at a fresh record high, buoyed by hopes of an expedited rate cut from the Bank of England.

It came after official figures showed an uptick in unemployment across Britain, against the backdrop of slowing wage growth.

The pound fell to a low of 1.3 against the US dollar, before recovering slightly by market close.

Wall Street wavered as hopes of an impending end to the US government shutdown were dampened by declines in AI stocks, led by chipmaker Nvidia.

Shares in the chip giant fell after SoftBank sold its stake in the business for $5.8 billion to fund its own AI investments.

05:51pm

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The number of people receiving jobless benefits without having to look for work has climbed above four million for the first time.

Figures published by the Department for Work and Pensions (DWP) show the number of Universal Credit (UC) claimants with no requirement to look for a job rose to 4.03 million in October.

This is up from 3.9 million in September and 50pc above the 2.7 million level in July 2024, when Sir Keir Starmer became Prime Minister.

It means half of the record eight million people claiming Britain’s main unemployment benefit are now exempt from finding a job.

05:24pm

The FTSE 100 has closed at a record high amid predictions that the Bank of England could cut rates as soon as December.

The index jumped by 1.15pc to reach 9,899.6 points at the end of the day, after official figures published on Tuesday showed unemployment has hit a four-year high and wage growth has slowed.

Vodafone was the day’s top performer, with shares surging by 8.3pc after it upgraded its profit guidance and raised its dividend.

The listed housebuilders also closed notably higher, with Berkeley up 3.4pc and Barratt Redrow rising by 3.1pc.

05:02pm

Oil has pushed higher for a third consecutive day, with demand for fuel offsetting broader concerns about a global supply glut.

West Texas Intermediate, a benchmark in oil pricing, climbed by as much as 1.5pc to around $61 per barrel amid rising premiums for fuels such as diesel and gasoline.

The rise also came amid increasing optimism that the US government shutdown could soon end. Traders have also continued to weigh up the impact of US sanctions on Russian oil.

04:46pm

Shares in chip giant Nvidia continued to fall during Tuesday trading after Japan’s SoftBank sold its entire stake in the company.

Nvidia’s stocks traded 3.5pc lower at $192.16, after the investor said it was preparing to fund its own projects focusing on artificial intelligence (AI).

The S&P 500 has edged down by 0.2pc to 6,818, while the Nasdaq was down by nearly 0.8pc amid jitters over the tech market.

Other Wall Street tech stocks that took a tumble included CoreWeave, which fell by 14pc after it slashed its revenue forecast.

04:06pm

The FTSE 100’s surge to an all-time high has put it “within a whisker” of hitting a level of 10,000 points for the first time, according to analysts at AJ Bell.

The blue-chip index reached 9,885 in Tuesday afternoon trading, fuelling speculation it will soon rally to 10,000 despite ongoing fiscal uncertainty.

Dan Coatsworth of AJ Bell, said: “The FTSE 100 is within a whisker of hitting 10,000 and it could only be a matter of days or hours before reaching this triumphant level.

“It’s been a historic year for the UK as the FTSE 100 has outperformed all the major US stock indices. Hitting 10,000 would be the cherry on top, proving to cynics that the UK market is not stuck in the mud.

“Chancellor Rachel Reeves would love the FTSE 100 to hit the magic 10,000 level before the Budget, so she can use the achievement to help back her campaign to get more people invested in UK assets. There needs to be some good news hook for the Budget, as all signs point towards more ‘difficult decisions’ by the Chancellor on the day.”

03:40pm

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Aston Martin has put more than 100 factory jobs at risk as the James Bond carmaker battles the fallout from Donald Trump’s tariffs and a slowdown in China.

The company confirmed on Tuesday that it was “taking steps” to strengthen its finances in response to the “global macro-economic environment”.

Plans are expected to include cutting more than 100 jobs at the marque’s factory in St Athan, Wales, where the DBX SUV is manufactured. The plant currently employs around 700 people.

The Unite union, which represents many workers at the factory, has described the situation as “devastating” and said it was seeking to minimise job losses.

03:16pm

The cost of UK borrowing has declined following the latest private sector jobs data from across the Pond.

The latest payrolls figures from ADP showed American companies shed an average of 11,250 roles a week in the four weeks to October 25.

Given the lack of official data during the US government shutdown, private data has taken on greater significance.

Added to that bond trading is closed in the US for Veterans Day, meaning the drop in payrolls caused an outsized move in UK gilt yields.

The yield on 10-year gilts – a benchmark for government borrowing costs – fell as much as nine basis points to 4.38pc.

02:48pm

Wall Street’s biggest lender has predicted that the Bank of England will lower interest rates three more times by the middle of next year.

JP Morgan has forecast rate cuts in December, March and June after official figures showed unemployment jumped to 5pc just as wage growth slowed to a three-year low.

The bank had previously only two more reductions in February and April.

Chief UK economist Allan Monks said there was “clearer evidence of slack” in Britain’s economy.

However, he warned policymakers would “remain cautious” over how far to cut rates next year over concerns that inflation “could get stuck above target after peaking”.

02:35pm

Wall Street’s main stock indexes lacked direction at the start of trading after SoftBank sold its entire stake in tech darling Nvidia.

The Dow Jones Industrial Average was up 0.1pc to 47,418.95 but the S&P 500 declined 0.1pc to 6,823.32 over concerns the boom in artificial intelligence stocks could be nearing its peak.

The tech-heavy Nasdaq Composite was down 0.4pc to 23,437.98 after rallying to its largest daily gain since May on Monday over hopes the US shutdown will soon end.

01:57pm

The pound has slumped as traders bet on rate cuts and the end of the US shutdown could push it lower, according to analysts.

Sterling has dropped as much as 0.4pc today towards $1.31, although it was last flat against the dollar.

Jane Foley of Rabobank said the impending end of the US shutdown would decide whether the pound drops below $1.30, as investors prepare for a deluge of economic data held back during the pause in federal operations.

She said sterling also faced “headwinds” from the upcoming Budget and further potential declines in inflation.

She said: “The market is currently awaiting the return of official US data releases to decide whether to step-up or step-down current expectations regarding the pace of Fed easing.

“We will be revising our dollar forecasts in the coming weeks potentially in favour of a more robust outlook for the greenback.”

01:20pm

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Labour ministers want you to buy an electric vehicle (EV). Or do they?

Heidi Alexander, the Transport Secretary, pledged to make it “cheaper for those who do want to make the switch” in July, before announcing a grant of up to £3,750 for qualifying EVs.

Yet just four months later, Rachel Reeves is now mulling a high-profile tax raid that could add hundreds of pounds to the annual running costs of an electric car.

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12:56pm

Housebuilding stocks have been given a boost by increasing bets that the Bank of England will cut interest rates next month.

Developers across the FTSE 100 and FTSE 250 were up 1.7pc as money markets put the probability of a reduction in borrowing costs in December at 87pc.

Vistry rose at the fastest pace, up as much as 3.1pc, as traders also began to favour the chances of a third rate cut by September next year, having previously bet on just two more reductions in the Bank Rate, which sits at 4pc.

Chris Beauchamp, an analyst at IG, said: “This expectation of looser policy has given a boost to housebuilder shares – Berkeley, Barratt Redrow and Persimmon are all higher.

“Some of the impact of lower borrowing costs will be offset by the expected tax rise heading our way in the Budget, but further rate cuts also loom on the horizon, particularly if inflation keeps coming down too.”

12:32pm

US stock indexes were muted after one of world’s most high-profile technology investors has sold its entire stake in the $4.7tn (£3.6tn) chip giant Nvidia for $5.8bn.

Tech shares resumed their decline despite a rebound on Monday over hopes the US government shutdown was coming to an end.

The Nasdaq had posted its largest daily gain since May 27 and the S&P 500 recorded its biggest one-day percentage rise since mid October.

However, concerns have returned after Japan’s SoftBank – one of the world’s most aggressive technology investors – disclosed it offloaded its entire shareholding in Nvidia in October. Nvidia shares were down 1.5pc in premarket trading.

Ahead of the opening bell, the Dow Jones Industrial Average was flat, the S&P 500 was down 0.2pc and the Nasdaq 100 slipped 0.4pc.

12:17pm

British investors are pulling cash out of global stock market funds at a record pace over fears that the Chancellor will mount a fresh tax raid at her Budget.

Nearly £7.3bn has been withdrawn from equity funds by UK-based investors since July, the largest outflow ever recorded in a four-month period, according to new data.

Edward Glyn, head of global markets at Calastone, which compiled the findings, said there was “growing concern about Rachel Reeves’s Budget and the anticipated tax implications”.

He said: “For some, it’s a simple matter of crystallising capital gains in case rates go up. This drove a huge uptick in selling this time last year and it’s clearly round two in 2026.”

11:56am

The cost of government borrowing dropped sharply as traders increased bets on interest rate cuts by the Bank of England.

The yield on two-year UK gilts – bonds which are sensitive to the outlook for rates – fell by seven basis points to 3.73pc, which was the lowest since August last year.

The 10-year gilt yield – a benchmark for the cost of government borrowing – fell by six basis points below 4.4pc

11:29am

The pound slumped for the first time in four days after official figures showed unemployment hit 5pc.

Sterling fell 0.3pc to $1.313 after being close to hitting $1.32 on Monday as traders increased bets that the Bank of England would cut interest rates to support Britain’s weakening jobs market.

The pound fell as the yield on two-year UK gilts, which are sensitive to interest rates, dropped seven basis points to 3.73pc as traders bet there was a 87pc chance the Bank Rate would be lowered from 4pc to 3.75pc next month.

Modupe Adegbembo, an economist at Jefferies, said: “Markets still underestimate the depth of the Bank’s potential easing cycle.”

She added: “Given the weakness in the labour market and the additional fiscal tightening likely to be delivered by the Chancellor, we expect the Bank of England to bring the Bank Rate down to around 3pc.”

The pound fell 0.5pc against the euro to €1.314, making the single currency worth 88.1p. The euro reached 88.3p last week, its highest level since May 2023.

10:51am

An interest rate cut should happen next month so long as the Budget does not stoke inflation, an economist has warned.

Thomas Pugh, chief economist at RSM UK, said the jobs market was “weakening” after the rise in unemployment in the three months to September and decline in private sector wage growth.

He said this “throws the door wide open to a December rate cut – as long as the budget is as deflationary as the Chancellor hinted at last week”.

He acknowledged that total pay growth “fell by more than expected”, which “would probably be enough to prompt the MPC into a rate cut in December, even without a big disinflationary Budget”.

He added: “The slowdown in regular pay growth combined with rising inflation means that real total pay growth was just 0.7pc in September.

“With pay growth likely to ease a bit more, further stagnation in real incomes and living standards looks likely.

“That will present a further challenge for the Chancellor who needs to raise around £30bn to £40bn in taxes while remembering that one of the governments six “milestones” was to raise living standards across the UK.”

Regular wage growth in the three months to September 2025 was 4.6% excluding bonuses, down from 4.7% the previous period.

Including bonuses the rate was 4.8%, down from 5.0%.

Read the release ➡ https://t.co/V4SR6sQQ6y pic.twitter.com/WqvDd4ovFA

— Office for National Statistics (ONS) (@ONS) November 11, 2025

10:20am

Andrew Griffith, the shadow business secretary, said Labour ministers “should hang their heads in shame” after the unemployment rate hit 5pc.

He said: “The £25 billion National Insureance hike, falling business confidence and threat of draconian union and worker rights have all contributed to today’s rise in unemployment to 5pc.

“With young people most impacted, ‘Generation Jobless’ is now happening on their watch.”

09:59am

Prices in Britain are likely to stay higher for longer, according to a Bank of England policymaker, who to urged caution on future cutting of interest rate cuts.

Megan Greene, a member of the Bank of England’s Monetary Policy Committee, has warned the UK could be “facing inflation persistence”.

Speaking at UBS’s European Conference, Ms Greene warned that household and business inflation expectations have been rising for a year.

She said: “I’m worried about inflation persistence in the UK.”

Ms Greene added that although inflation is expected to have peaked she is concerned about the impact of wage growth and next year’s pay settlements.

“On balance, that would suggest that monetary policy should be more restrictive than otherwise.”

Last week, the Bank of England’s Monetary Policy Committee voted 5-4 to hold interest rates at 4pc.

She added that today’s unemployment figures are “not great” but added “it’s possible the worst is behind us”.

Ms Greene said that wage growth is “still way too high” but added that progress on slowing earnings growth was “encouraging” for inflation.

She added: “The disinflationary process is still ongoing in the UK but I have questions about whether it has slowed.”

The latest figures from the Office for National Statistics showed that inflation in the UK stood at 3.8pc in September.

09:43am

Rising business costs and weak growth are behind the downturn in Britain’s jobs market, according to the recruitment industry trade body.

Recruitment and Employment Confederation (REC) chief executive Neil Carberry said: “Today’s official jobs statistics are a stark reminder to the Chancellor that she needs to back business to tackle the rising unemployment and redundancies caused by a year of weak growth and rising business costs. Only business can deliver the growth she needs to balance the books.”

He added: “Pay is down from its peaks but much of the upward momentum is coming from things that the government controls – such as statutory minimum rates and public sector awards.

“A more sustainable path for these rates ought to see pay moderate further over the next six months.”

09:16am

The FTSE 100 rose at the fastest pace among major European stock markets as traders raised bets on the Bank of England cutting interest rates.

The UK’s flagship stock index was up 1pc while the Cac 40 in France gained 0.6pc and the Dax in Germany edged up 0.1pc. The mid-cap FTSE 250 in London rose 0.6pc.

Global stocks have enjoyed a strong start to the week amid relief that the end to the US government shutdown could mean a restart of official data releases that are crucial for investors.

The US Senate passed a deal late on Monday that would restore federal funding and end the record shutdown.

The FTSE 100 has been pushed higher by increased bets that interest rates will be cut next month following the downturn in Britain’s jobs market.

The index was boosted by Vodafone, which surged as much as 7pc after it upgraded its full-year forecast for both earnings and cash flow and returned to quarterly growth in Germany. It also increased its dividend payout to shareholders for the first time in seven years.

08:59am

Bosses were reluctant to hire as they over worried about what might come in the Budget, an economist said.

Martin Beck, chief economist at WPI Strategy, said: “Signs of renewed weakness in the UK labour market suggest the real economy is starting to feel the chill of Budget tax uncertainty.

“With pay growth slowing further, the data strengthen the case for the Bank of England to cut interest rates next month.”

He warned that the “prospect of new tax rises in the upcoming Budget poses further risks to employment, particularly if the Chancellor again looks to raise taxes on businesses”.

Mr Beck added: “But this time, Rachel Reeves is more likely to target earners rather than employers.”

08:55am

It is “not surprising” that government spending is rising sharply when public sector pay growth outstrips the private sector, according to former Bank of England policymaker Andrew Sentance.

Average regular earnings grew at 4.2pc in the private sector between July and September, while public sector pay hit a two-year high of 6.6pc.

Chancellor Rachel Reeves is expected to raise taxes in the Budget partly because of rising government spending.

Regular pay in the UK up 4.6pc in past 3 months on a year ago. Private sector pay growth has eased to 4.2pc but public sector pay up 6.6pc on a year ago. Not surprising gov't spending is rising sharply!

— Andrew Sentance (@asentance) November 11, 2025

08:37am

The Liberal Democrats called for the Government to reverse last year’s National Insurance increase in response to rising unemployment.

Rachel Reeves conducted a £25bn raid by putting up employer contributions on the levy and changing payment thresholds during last year’s Budget.

Lib Dem Treasury spokesman Daisy Cooper MP said: “Surely the writing is on the wall now for the Chancellor’s jobs tax?

“Everyone except Rachel Reeves seems to have woken up to the fact that forcing small businesses to pay more in tax for giving people jobs would damage job opportunities. Now the proof is staring her in the face.

“The Government must reverse their damaging national insurance hike at the Budget, and commit to saving the small businesses who employ millions in Britain and are at risk of collapse, if they’re to have any hope of reversing today’s concerning trend.”

08:25am

The rise in unemployment was worse than analysts and the Bank of England had forecast, which is why economists say it has strengthened the case for a Christmas interest rate cut.

The rise in the unemployment rate to 5pc in the three months to September is higher than the 4.9pc forecast by market watchers and the Bank’s Monetary Policy Committee (MPC).

Sanjay Raja, chief UK economist at Deutsche Bank, said the rise in redundancies to a four-year high of 134,000 was also a surprise.

“Today’s data speaks to two things: one, there’s more slack building in the labour market – and perhaps more so than assumed by the MPC in its November projections; and two, pay momentum continues to slow. Both should be encouraging for the MPC,” he said.

“While Budget uncertainty may be hampering hiring plans heading into the fourth quarter, one thing is clear: today’s data should continue to strengthen the case for a Christmas rate cut.”

08:15am

Britain’s businesses have been rocked by fears about tax rises in the Budget, an economist has said as unemployment hit a four-year high.

ICAEW economics director Suren Thiru said: “These figures suggest that the UK’s labour market is suffering from pre-Budget jitters, as businesses already weakened by April’s rise in national insurance look to cut recruitment further in anticipation of another difficult Budget.

“This weakening in wage growth is likely to accelerate over the winter as the downward pressure from an ailing economy, significant staffing costs and more job losses increasingly restrains pay awards.

“The jobs market could bear the brunt of Budget tax rises as weaker customer demand, amid a possible income tax hike and increasing costs on business, may mean higher unemployment than the Bank of England currently predicts.

“These underwhelming figures add credence to the more dovish tilt to last week’s policy decision and the current rate at which the labour market is loosening notably increases the chances of a December interest rate cut.”

08:03am

The FTSE 100 opened sharply higher as Britain’s weakening jobs market boosted the case for interest rate cuts next month.

The UK’s benchmark stock index climbed 0.8pc to 9,866.11 while the domestically focused FTSE 250 jumped by 0.6pc to 22,092.57.

07:59am

The value of the pound dropped after official figures showed unemployment rose to a four-year high of 5pc.

Sterling dropped by 0.4pc against the dollar to $1.313 as traders increased bets that the weakening jobs market would lead to interest rate cuts.

The pound declined by 0.4pc versus the euro to €1.136 as money markets indicated there is an 85pc chance of a reduction in borrowing costs in December, up from 72pc on Monday.

The Bank of England’s Monetary Policy Committee (MPC) voted last week to keep rates at 4pc but indicated they were on a “gradual path” lower.

Rob Wood, chief UK economist at Pantheon Macroeconomics, said: “The MPC will react to weaker-than-expected job growth with a rate cut in December, and will be eyeing a follow-up reduction in early 2026.”

He added: “The MPC are on a hair trigger, and today’s data inevitably reduce our confidence that the labour market is stabilising after April’s payrolls tax hike hit hiring.”

07:49am

The Conservatives said the Government’s policies were “driving opportunity out of Britain” as unemployment rose to 5pc.

Shadow work and pensions secretary Helen Whately said: “Under this Labour Government, we have now experienced 13 consecutive months of rising unemployment.

“That’s thousands of families without the security of a regular pay packet thanks to the Chancellor’s bad choices hiking up taxes on jobs, piling red tape on businesses, and destroying confidence in the economy.

“And because the Government doesn’t have the backbone to take tough decisions, these same families now face even more punishing tax rises, despite the Chancellor’s promise that they’d never come.

“Their high-tax, anti-business policies are driving opportunity out of Britain and making life harder for families and those searching for work.

“And with an impending Budget of further tax rises, the situation is only going to get worse.

“Only the Conservatives have the team and the plan to unleash businesses, grow the economy, cut waste, and get Britain working again.”

07:47am

The Bank of England has a stronger case to cut interest rates next months after the latest downturn in Britain’s jobs market, an economist has said.

Yael Selfin, chief economist at KPMG UK, said the labour market “continues to weaken as employers await Budget”.

The number of workers on UK payrolls fell by 32,000 during October to 30.3 million, following a 32,000 drop the previous month.

Meanwhile the total number of vacancies was estimated to have fallen by 99,000 in August to October compared to the same time last year.

Mr Selfin said: “Today’s data strengthens the Bank of England’s case to resume cutting interest rates next month, as moderating wage pressures and a softening labour market are expected to bring wage growth closer to levels consistent with the inflation target by the end of the year.”

He added: “Public sector pay growth may now be approaching a peak, with last year’s generous settlements not expected to be repeated given the fiscal pressures the Chancellor is facing.

“Meanwhile private sector pay growth, the Bank’s preferred measure, is also anticipated to fall further with more people in the labour market seeking work, weakening workers’ bargaining power.

“Unemployment increased to 5pc in the three months to September. Hiring activity remains weak and survey evidence suggests that additional uncertainty from the Budget is keeping a lid on activity, as employers await the details of any fiscal measures.”

The Bank of England kept interest rates on hold at 4pc last week.

07:35am

Work and Pensions Secretary Pat McFadden said: “Over 329,000 more people have moved into work this year already, but today’s figures are exactly why we’re stepping up our plan to get Britain working.

“We’ve introduced the most ambitious employment reforms in a generation to modernise Jobcentres, expand youth hubs and tackle ill-health through stronger partnerships with employers.

“And this week we’re going further by launching an independent investigation that will bolster our drive to ensure all young people are earning or learning.

“We’re backing businesses to grow and create jobs by cutting red tape, signing trade deals and securing hundreds of billions in investment, which helped make the UK the fastest growing economy in the G7 in the first half of this year.”

07:33am

Private sector pay grew at its slowest pace in nearly four years despite surging wages in the public sector.

Average regular earnings grew at 4.2pc in the private sector between July and September, down from 4.4pc in the previous three month period and the worst since early 2021.

Meanwhile, typical earnings in the public sector grew to a two-year high of 6.6pc, up from 6pc in the previous three-month period.

ONS director of economic statistics Liz McKeown said: “Wage growth in the private sector slowed further, but we continue to see stronger public sector pay growth, reflecting some pay rises being awarded earlier than they were last year.”

07:23am

ONS director of economic statistics Liz McKeown said: “Taken together, these figures point to a weakening labour market.

“The number of people on payroll is falling, with revised tax data now showing falls in most of the last 12 months.

“Meanwhile, the unemployment rate is up in the last quarter to a post-pandemic high.

“The number of job vacancies, however, remains broadly unchanged.”

07:19am

Thanks for joining me. The unemployment rate has climbed above 5pc for the first time in four years, official figures showed, in a sign the economy is weakening.

The unemployment rate has hit its highest level since the three months to February 2021. At the same time, pay growth in the public sector soared to a two-year high of 6.6pc, while private sector pay growth slumped to 4.2pc, its weakest since early 2021.

The total number of people seeking work in the three months to September climbed to 1.79m, which was the highest total since December 2020 when Britain was in Covid lockdown.

More than one-quarter of the unemployed have been so for more than 12 months, the first time that has been true in three years, according to the Office for National Statistics (ONS).

The workforce was hit with 134,000 redundancies during the period, which was the heaviest blow since the first three months of 2021.

The rise in people out of work comes as wages also fell to a three-year low.

Average regular pay fell to 4.6pc in the three months to September, which was its weakest since February to April 2022. Here is what you need to know.

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Asian shares were mostly lower as the recent rebound fuelled by the impending end of the US shutdown lost steam.

The US Senate passed legislation to reopen the government but in Tokyo, the Nikkei 225 lost 0.5pc to 50,675.92.

Shares have been hit by criticism that tech share prices have shot too high due to the mania surrounding artificial intelligence, which some have likened to the 2000 dot-com bubble that ultimately burst.

Chinese shares also declined. Hong Kong’s benchmark Hang Seng index fell 0.2pc to 26,595.97 and the Shanghai Composite index shed 0.4pc to 4,002.06.

South Korea’s Kospi, recovering from last week’s fell below the 4,000 level, initially rose more than 1pc but finished up 0.4pc at 4,087.56.

Australia’s S&P/ASX 200 dropped 0.2pc to 8,818.80. Taiwan’s Taiex fell 0.3pc, while the Sensex in India shed 0.4pc.

US markets closed up as hopes that a record shutdown of the Federal government could be drawing to a close gathered pace. The Dow Jones was up 0.8pc at 47,368.63, while the S&P 500 climbed 103.63 points, or 1.54pc, to 6,832.43. The tech-heavy Nasdaq was up 2.3pc at 23,527.17.

Nvidia, the world’s most valuable company, climbed 5.8pc as fears that AI stocks are overvalued receded on renewed optimism. Shares in Palantir, which fell sharply last week, also rebounded more than 8pc.

Meanwhile, gold prices climbed nearly 3pc on Monday to $4,118 per ounce, with silver also surging 4.6pc. Bitcoin was up 1pc to more than $105,000 per coin.

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