Investing.com -- British stocks were higher on Tuesday, while the pound edged back above $1.35 amid ongoing trade discussions between the U.S. and China in London. 

The blue-chip index FTSE 100 rose 0.2% and the British pound fell over 0.3% against the dollar to 1.35. 

DAX index in Germany fell 0.6%, the CAC 40 in France gained 0.2%.  

Unemployment rate rises again

U.K. labor market data showed a continued rise in unemployment, adding to signs of a cooling jobs market and potentially reinforcing the case for further interest rate cuts by the Bank of England.

The Office for National Statistics reported that the unemployment rate increased to 4.6% in the three months through April, matching forecasts and up slightly from 4.5% in the previous period.

According to official data, British wages rose by 5.2% in the three months ending April, a slower increase than anticipated and the weakest growth since Q3 2024.

This subdued wage growth may influence the Bank of England’s approach to the timing and pace of future interest rate reductions.

Latest on U.S.-China trade talks

Trade negotiations between the two largest global economies are scheduled to continue on Tuesday, with increasing optimism that the discussions will lead to further easing of the ongoing tariff conflict between the U.S. and China, following their agreement in May to temporarily reduce tariffs.

On Monday, President Trump commented that the talks were progressing positively and that he had received exclusively favorable updates from his team in London.

Rolls-Royce (OTC:RYCEY) closes lower despite SMR unit winning U.K. nuclear contract

Rolls-Royce Holdings PLC (LON:RR) shares climbed early in the session before closing 0.9% lower despite its small modular reactor unit, Rolls-Royce SMR, being chosen by Great British Nuclear (GBN) to develop three SMR plants across the U.K.

The decision follows a competitive selection process spanning two years and marks a major step forward for Rolls-Royce SMR in helping shape the country’s future energy strategy.

Diageo rises on reported talks to sell Indian Premier League team 

Diageo PLC (LON:DGE) shares advanced following reports that the beverage giant is weighing the possibility of offloading its Indian Premier League franchise, Royal Challengers Bengaluru - a deal that could potentially fetch up to $1.1 billion.

According to Bloomberg and various Indian media sources, Diageo is said to be exploring strategic alternatives for the cricket team, which is held via its Indian subsidiary, United Spirits Ltd (NSE:UNSP).

Bellway raises full-year revenue forecast

Bellway PLC (LON:BWY) lifted its full-year revenue outlook following a 7.7% rise in forward orders and stable reservation activity throughout the spring selling period.

The British homebuilder now anticipates completing between 8,600 and 8,700 housing units by the end of its financial year on July 31.

Shares surged over 7% on Tuesday. 

FirstGroup shares surge 12% on strong profit growth

FirstGroup PLC (LON:FGP) saw its stock climb over 12% on Tuesday after posting solid annual results and unveiling a £50 million share repurchase program.

For the 52 weeks ended March 29, the British transport group reported a 9% increase in adjusted operating profit, reaching £222.8 million. Adjusted earnings per share rose 16% year-on-year to 19.4 pence, surpassing market forecasts.

Adjusted revenue also climbed to £1.37 billion, compared with £1.28 billion in the prior period, while statutory revenue stood at £5.07 billion.

Ryanair to buy $500 mln in Spare Engines

Ryanair Holdings PLC (LON:0RYA) said it will purchase 30 additional LEAP-1B spare engines from manufacturer CFM, a deal valued at $500 million based on list prices.

The low-cost carrier expects the engines to help lower fuel usage per flight as it continues expanding its fleet at a rapid pace.