Government borrowing costs in several advanced economies continued to rise to levels not seen in decades on Tuesday, as hopes of an end to the US-Iran war faded.

Concerns about the inflation outlook worsened after the ceasefire between Washington DC and Tehran ended on Monday night without an agreement, with no progress on the reopening of the strait of Hormuz.

Donald Trump’s threat to bomb Oman if they “get in the way” of negotiations helped to push oil higher on Tuesday, to above $91 a barrel, and investors fear higher energy prices will push inflation up, leading to higher interest rates. Brent is currently trading 0.6% higher at $91.47 a barrel.

Fiscal pressures are also rising as governments ramp up defence spending, which is expected to drive borrowing higher in leading European countries such as Germany and the UK.

US government bond yields rose for a third session, ⁠as fears over the US-Iran ⁠conflict and ​inflation converged with a global bond selloff.

The US 30-year Treasury yield rose to 5.3%, its highest level since 2007, while the benchmark 10-year yield, which has been climbing since the start of the Iran conflict, touched its highest ⁠point since early 2025 at 4.74% and is pushing towards 4.75%.

US industrial production cooled by a tenth ​of a percentage point to 0.2%, undershooting economists’ expectations in part due to a decline in production of consumer goods.

Will Compernolle, macro strategist at FHN Financial in Chicago, told Reuters that US yields are partly ​drifting higher in light ‌summer trading volumes because this week is light on economic data and there are no public remarks from US central bank policymakers, leaving Middle East ‌tensions to set the direction. The collapse of the memorandum of understanding reached by Washington and Tehran in June showed that the energy shock is likely to persist, he added.

I think that’s weighing on bonds because we’re living in this world where we’re going to have supply shock after supply shock.

He added that government bonds are also competing with ‌capital attracted to the soaring capital expenditures for artificial intelligence.

Wage growth in the UK slowed in June and vacancies hit a five-year low as workers came under pressure from a renewed cost of living squeeze amid the economic impact from the Iran war.

Figures from the Office for National Statistics show average growth in total earnings, including bonuses, fell to 4.1% in the three months to June, down from 4.4% in the three months to May.

The pay slowdown could deter the Bank of England from raising interest rates this year, some economists suggested.

Liz McKeown, the ONS director of economic statistics, said the data showed “some softening” in the jobs market despite a broadly unchanged picture overall, in a potential sign of stabilisation after a sharper slowdown earlier this year.

Regular wage growth has remained broadly stable in recent months. However, private sector pay growth has continued to ease, while public sector pay growth remains elevated due to the timing of the latest NHS pay awards.

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Thank you for reading. We’ll be back tomorrow. Bye! – JK

“We’re pleased to welcome Stonegate Pub Partners as a sponsor for the Great British Pub Awards 2026” read a post on the event’s Facebook page. Within minutes it had backfired.

“Must be 1st April again,” said one commenter. “This is like Pontius Pilate being appointed child welfare ambassador,” said another. Other comments about the UK’s largest pub company were significantly less polite.

Days earlier, Stonegate had been named as the subject of an investigation by the industry regulator, the Pubs Code Adjudicator (PCA) over alleged mistreatment of the tenants who run more than 3,000 of its venues.

Melissa Phillips’s father, known locally as “Phil”, was one of them. After taking over a more or less derelict venue in Basingstoke, Hampshire, he renamed it Laarsen’s, an anagram of his beloved Arsenal FC, and turned it into a highly successful football pub that the company cited to trainee publicans as a success story.

Great Britain risks running out of gas in the 2030s despite its growing clean energy sources, unless ministers take “unprecedented” action to guard against a future gas supply shock, according to an official assessment of the country’s gas security.

The government is considering plans to provide direct financial support to safeguard the country’s ageing gas infrastructure after a consultation found that a “high stress scenario” could mean homes and businesses run out of gas within the next decade.

A range of measures to support Britain’s gas sector is now being considered after most respondents said the industry was not likely to prepare for “low probability, high-impact events”, in which gas supplies could run dry as North Sea reserves continue to deplete.

Three-quarters of respondents agreed with a warning issued last year by the National Energy System Operator that an “emerging risk to gas supply security” could mean that by 2030 homes and businesses would be left without gas during a prolonged period of cold weather.

Michael Shanks, the energy minister, said:

Any form of government intervention or investment in the gas market would be unprecedented and cannot be a decision we take lightly.

These could include offering financial support to the owners of gas storage facilities and gas pipeline operators, to make it economic to upgrade and maintain them in the decades ahead.

Shanks said the UK would continue to cut the UK’s reliance on fossil fuels by growing its clean energy source.

However, we recognise that this transition will not happen overnight; the gas system will still play an important role in our energy system for decades to come.

Ikea is taking on eBay, Facebook Marketplace and Vinted with its own secondhand selling site in the UK.

The new platform, which will enable shoppers signed up to the Swedish company’s membership scheme to connect directly to one another to buy and sell pre-owned Ikea items locally, is due to launch in the next few months.

The move by the world’s biggest furniture retailer follows its trials of online secondhand marketplaces in Spain and Norway, and comes five years after it began buying and selling used Ikea items in some of its UK stores.

A spokesperson said:

Our goal is to make passing on beloved Ikea pieces as seamless as possible. We’re creating a trusted and vibrant space to make it quick and easy for our Ikea Family [loyalty scheme] members to trade directly with one another.

Further details of the UK online site will be announced in the coming months, the company said. On the Spanish version selling is made easier with pre-filled product descriptions and price suggestions provided by Ikea. The retailer also offers sellers 15% extra on the price of the item sold if they agree to be paid in the form of an Ikea gift card.

Buyers in Spain – where a Poäng armchair is being sold for €56, about half the price of a new version – will have to pay a 5% “protection fee” from January next year to fund various costs related to the sale, in a similar system to that operated by Vinted.

Britons are increasingly embracing secondhand buying, pushing up sales at Vinted, which began as a clothes resale site but is now expanding into homewares and electronics, as well as at Facebook Marketplace, Gumtree and smaller, more upmarket sites such as Vinterior.

The US secondhand site eBay was recently bought by UK fashion seller Depop for $1.2bn. Preloved items now make up about a 10th of global fashion sales.

Corn and soybeans traded on the Chicago exchange have gone up in price for a third session, as crop data and weather reports triggered worries over this year’s harvest in America’s Midwest.

Higher oil costs and Chinese demand for American soybeans have also pushed up prices.

The most active corn contract on the Chicago Board of Trade (CBOT) rose 0.6% to $4.92 1/4 a bushel, after hitting $4.93, its highest since April last year.

CBOT soybeans climbed 0.9% to $12.27 a bushel, after touching $12.27 1/4 a bushel.

South Dakota’s corn yield prospects and soybean pod counts are below last year’s and the three-year average, according to findings by scouts on their annual tour of top US producing states.

The US Department of Agriculture cut its corn and soybean yield forecasts last week, following heavy rain in the Midwest.

Wheat rose 0.2% to $690 3/4 a bushel, holding on to recent gains linked to war disruptions to Black Sea supplies, with Russia’s war on Ukraine in its fourth year.

Over on Wall Street, shares in Klarna are set to fall by a fifth when trading begins after the buy now, pay later company cut its revenue guidance.

Klarna cut its expectations for how much revenue it will generate this year, blaming trends in German retail.

It now expects to bring in revenues of between $4.08bn and $4.16bn of revenue this year, down from about $4.3bn.

Klarna has trimmed its forecast for Gross Merchandise Value – the value of the goods and services bought using Klarna – to between $149.0bn and $151.0bn this year, down from a previous forecast of $155.0bn.

Shares in Klarna are down 21% in pre-market trading.

Klarna also reported a rise in GMV, revenue and operating income in the second quarter of the year.

Sebastian Siemiatkowski, CEO & co-founder of Klarna, said:

“Over 120 million consumers now use Klarna, and each is using it for more of their everyday spend — revenue per active consumer grew 24%. That deepening engagement is why transaction margin dollars grew 42%, well ahead of revenue and volume. We measure our progress in transaction margin dollars.”

US stock futures are down, pointing to a lower open on Wall Street later.

The FTSE 100 index in London edged 13 points, or 0.1%, higher to 10,733. The German, French and Italian markets have lost between 0.25% and 0.5%, while the Spanish market is 0.3% higher. In Asia, Japan’s Nikkei slumped 2.5%.

Brent crude is trading above $90 a barrel, at $90.91, after touching $91.85 a barrel, after the ceasefire between the US and Iran expired on Monday, with Donald Trump ruling out an extension.

The rise in energy prices has sparked increases in government borrowing costs to multi-decade highs, as investors worry about higher inflation on the back of rising energy prices, as well as higher government borrowing, partly driven by soaring defence spending in Europe.

The yield on the 30-year US Treasury bond rose above 5.3%, the highest level since 2007, while the benchmark 10-year yield is pushing towards 4.75%, near its highest level since January 2025.

The UK’s 10-year gilt yield is up 3 basis points at 5.08%.

Daniela Hathorn, senior market analyst at the trading platform capital.com, said:

Markets are showing a more cautious tone today as the calm that characterised the start of the week begins to crack. US equity futures are pointing lower, with the Nasdaq underperforming, as investors contend with a combination of rising long-term bond yields, renewed geopolitical uncertainty and some fresh nervousness around AI-related stocks. The S&P 500 remains close to record highs, but the backdrop is becoming less forgiving.

The bond market is arguably the bigger story. The US 10-year yield has pushed towards 4.75%, while the 30-year has climbed above 5.3%, its highest since 2007. This is happening despite softer recent economic data reducing expectations for an imminent Fed hike. Instead, the long end is responding to persistent inflation risks, heavy government borrowing and growing competition for capital—including debt issuance associated with the AI investment boom. That creates an uncomfortable environment for equities because financial conditions can tighten even without the Fed raising rates.

Geopolitics is adding to that pressure. Brent is back around $90 after the US-Iran negotiating window expired without a comprehensive agreement, while a vessel was struck attempting to transit the Strait of Hormuz today. Continued disruption in the Red Sea adds another layer of uncertainty. Markets are not treating this as an immediate systemic shock, but the longer oil remains elevated, the harder it becomes to dismiss the inflationary consequences.

The US-Israeli war on Iran, which began with airstrikes on Tehran on 28 February, has also had an impact on the UK housing market.

Half of homes in Great Britain are taking longer to sell than last year as volatile conditions in the mortgage market amid the Iran war prompt buyers to “wait and see” if they can get a better deal, according to a report.

As the Middle East conflict continues to unfold, the property platform Zoopla said homes in 180 out of 363 local authorities in England, Scotland and Wales were taking longer to sell compared with a year ago.

It said that although the national average time to sell a home had not changed – at 42 days – a widening regional gap had emerged as buyers in property hotspots raced to complete deals, while uncertainty over mortgage costs fuelled a more cautious approach elsewhere.

The report found the UK’s 10 fastest-selling markets were all in Scotland, with the lowest average time to sell at just 11 days in Falkirk. Carlisle and Barnsley in England were the fastest non-Scottish markets at 23 days each.

It said eight local authorities had an average time to sell of two months or more, led by Melton in the East Midlands, at 76 days, Westminster in London, and Teignbridge in the south-west.

Property buyers shopping for a mortgage deal have faced months of heightened volatility as the stop-start Iran war rattles financial markets – with a knock-on impact for the pricing of home loans.

The war in the Middle East led many lenders to pull deals in March, while the cost of a typical home loan soared amid fears that the conflict would reignite global inflationary pressures and force the Bank of England to raise interest rates.

The latest figures from the financial data provider Moneyfacts show the rate on an average two-year fixed residential mortgage stood at 5.61% on Monday – significantly higher than the rate of 4.83% before the outbreak of the conflict at the end of February.

The rate peaked at close to 6% in April. However, uncertainty remains as the Iran war continues to unfold, in a challenge for Threadneedle Street’s rate-setters.

Despite the easing in grocery price increases in recent weeks to a two-year low reported by a survey, overall inflation in the UK is expected to have risen to close to 3% in July.

British households are facing a renewed cost of living squeeze, with official figures expected to show ton Wednesday that soaring energy bills drove up inflation in July.

As the Iran war continues to send shock waves through global energy markets, economists predict the surge in UK gas and electricity bills last month will push Britain’s headline inflation rate to 2.9%.

In a fresh squeeze on household budgets, the figures from the Office for National Statistics (ONS) due on Wednesday are forecast to show a jump from a rate of 2.6% in June.

The Bank of England is considering raising interest rates from as early as September in response to fears over stubbornly high inflation becoming entrenched in the economy, although the latest jobs market data show it is stabilising or cooling, suggesting a rate hike may not be needed.

Reports also emerged that the water regulator Ofwat was considering plans to impose “surge pricing” on water usage during droughts. It could see customers charged more for water use during summer and less in winter, or else charged higher prices when they pass a threshold of water use, according to the Daily Telegraph.

The latest snapshot will highlight the challenge facing Andy Burnham’s government to ease the financial pressure on households and businesses before a difficult autumn budget.

Sentiment in the eurozone, driven by Germany, has improved again this month, suggesting the summer heatwaves and low water levels in key shipping routes along the Rhine and Danube won’t derail wider economic growth, analysts say.

Economic expectations rose further in August, as the main indicator from the ZEW institute (Zentrum für Europäische Wirtschaftsforschung in Mannheim) rose eight points from July to 31.4 points. The assessment of the economic situation improved even more, by 16.2 points but, at -21.5 points, remained in negative territory.

In Germany, the bloc’s biggest economy, sentiment climbed 7.9 points to 34.2 points, while the current conditions measure jumped 16.5 points to -61.1, the sharpest improvement in over a year.

Although current conditions remain deeply negative, expectations are a bright spot, having risen steadily since April’s low. At the sectoral level, gains were strongest in automobiles, chemicals, and mechanical engineering, a sign respondents see the domestic recovery gaining traction even as current conditions stay weak, according to analysts at Oxford Economics.

ZEW president Professor Achim Wambach said:

The positive trend in expectations further consolidates in August, likely due to the good quarterly results and the recent high level in exports. The German economy continues to benefit from the federal government’s infrastructure programmes although the record low water levels on the Rhine River present an additional acute risk affecting economic activity.

All industries report brighter expectations in Germany, especially the car industry where prospects improved by 22.2 points, although the balance is still in negative territory. The chemical and pharmaceutical industries, along with the mechanical engineering and metal industries, also recorded strong growth.

Expectations for private consumption continue to increase, by 9.0 points to minus 6.2 points. The construction industry improved by 1.4 points to 2.1 points.

Analysts at Oxford Economics said:

We are wary of reading too much into this optimism among financial market experts, as it may partly reflect recently strong equity performance. But it does support our view that the summer heat waves and low water levels on inland shipping routes won’t derail the wider economy.

We still expect economic momentum to slow in Q3 after the eurozone economy displayed remarkable resilience in Q2. The unwinding of temporary supports and rising energy prices pose a headwind for industry and will weigh on consumers’ purchasing power, which poses a risk to the consumption outlook.

Energy prices have risen again, boosting input costs and squeezing households’ purchasing power, while Q2’s order frontrunning ahead of tighter supply chains is set to unwind. We expect these headwinds to slow growth in Q3, before Germany’s fiscal stimulus lifts momentum later in the year.

In financial markets, government borrowing costs are continuing to rise, to levels not seen in decades, as the US-Iran war worsens again with the ceasefire now ended, and hopes for a permanent deal fading.

Also, governments are ramping up defence spending, which is expected to drive borrowing higher in major European countries such as Germany and the UK.

There is no progress on the reopening of the strait of Hormuz, a key shipping passage through which a fifth of global oil and gas supplies pass in normal times.

A senior Iranian official told Reuters on Monday that Tehran will shift to a “fully offensive” military posture because talks for a peace deal have stalled. And Donald Trump threatened to bomb Oman if they “get in the way” of negotiations, and ruled out extending the temporary ceasefire with Iran that expired on Monday.

Brent crude is up 0.2% at just over $91 a barrel this morning, and investors fear higher energy prices will push inflation higher.

The yield, or interest rate, on the 30-year US Treasury bond rose to 5.324% on Tuesday, the highest since June 2007.

The yield on the 10-year Treasury bond rose to 4.736% while the equivalent Japanese government bond yield climbed 2.5 basis points to 2.945%, the highest in three decades.

The yield on the UK’s 10-year gilt (as UK government bonds are known) rose 2.6bps to 5.076%. Germany’s 10-year Bund yield rose to the highest level since 2011 while France’s equivalent bond yield hit a 16-year peak.

Gordon Kerr, European macro strategist at KBRA, told Reuters:

Markets are increasingly focused on the prospect of higher government spending across Europe. combined with inflation concerns, that is contributing to upward pressure on long-dated bond yields.

In Asian stock markets, Japan’s Nikkei slumped 2.5% while European indices are trading slightly lower.

The UK’s FTSE 100 index dipped 0.15% and the pan-European Stoxx 600 index lost 0.5%, on track for a fifth day of losses.

The retail billionaire Mike Ashley has given the latest indication that his summer shopping spree may be far from over, after he increased his stake in luxury giant Hugo Boss to nearly half.

Ashley’s Frasers Group, which last week bought Harvey Nichols department stores for a reported £40m, increased its shareholding in the German fashion house to 48%, falling just short of taking full control.

In June, the British billionaire made a nearly €2bn (£1.73bn) takeover offer for the luxury group, but its board rejected Frasers’ bid as “inadequate” and urged shareholders not to accept Ashley’s offer.

The new, higher stake comes after 17.6% of shareholders accepted Ashley’s offer of €38 per share. That bid reflected only a 4% premium to Hugo Boss’s shares when it was tabled.

Despite this, Axel Rudolph, an analyst at investing platform IG, said it was “another major step towards gaining control” of the German company. Ashley’s new shareholding puts Frasers “firmly in the driving seat as it looks to increase its influence,” he added.

Ashley bought Harvey Nichols out of administration last week after the upmarket chain, which has 13 stores and 1,200 employees, warned it could run out of money if it did not find new funding. He also launched a bid to snap up the Australian footwear business Accent Group earlier this summer.

A 0.2% rise in UK foodservice inflation for July is the “calm before a potential storm”, experts in the sector have said as they brace for price hikes due to poor harvests.

The price of monthly price increases has slowed from 1.8% in June to 0.2% in July but climate-related disruption is fuelling market volatility, according to data from NIQ (Nielsen IQ) and business consultants Prestige Purchasing.

The drought has caused what could be the worst harvest on record for modern times. Of particular concern are vegetables, including broccoli, cauliflowers, potatoes, onions, carrots and parsnips. Fruit has done fairly well, however, with strong availability of British strawberries, raspberries, blackberries, blueberries, plums and early-season apples.

Global grain markets have also strengthened, with wheat exports facing disruption in the Black Sea, and growing conditions have been unfavourable due to the drought.

Shaun Allen, chief executive of Prestige Purchasing, told the Propel newsletter:

July’s marginal 0.2% increase feels like the calm before a potential storm. With UK drought conditions actively threatening domestic vegetable yields, and global grain markets reacting to renewed geopolitical stress in the Black Sea, operators cannot afford to be complacent. The transition from summer to autumn will be a critical period for supply availability, making proactive, data-led procurement absolutely essential.

Reuben Pullan, senior insight consultant at NIQ, added:

Broadly flat prices in July disguise significant volatility in the foodservice supply chain, and buyers face a very uncertain autumn and winter. While high temperatures can work to the advantage of many hospitality businesses in sales terms, extreme climate issues are likely to have seismic impacts on their operations in the years to come. Mitigating inflation is an urgent priority for venues seeking to retain guests and protect margins.

Grocery inflation in the UK has slowed to the lowest rate in almost two years, bringing some relief to households, a monthly survey shows (ahead of tomorrow’s official inflation data).

Inflation at supermarkets and other grocers eased for a fifth month, to 2.1% in the four weeks to 9 August – the lowest since October 2024, according to Worldpanel by Numerator.

Shoppers continue turn to promotions to keep costs down, with 31.3% of sales including a deal in the last month – the highest level this year.

While premium own-label supermarket products moved back into double figures for the first time since March at 11.1%, 96 million shopping trips included a value own-label product in the last four weeks.

Sally Ball, business unit director at Worldpanel by Numerator, said:

With inflation slowing again, this marks the fifth consecutive month of easing prices. Shoppers are feeling the relief with 39% now feeling financially comfortable, marking the highest level of financial confidence since November 2021.

But it’s by no means the same picture for all, with 20% reporting that they are struggling, and this has a clear impact on spending decisions. Among these households, 30% are more likely to prioritise grocery essentials over additional summer spending such as holidays and travel.

The hot weather drove shoppers to buy summer favourites with ice cream and sorbet sales rising 26.1% and suncream up 58.4%.

Sales of dips rose 23.3%, while coleslaw was close behind at 23.1% and potato salad up 22%. Chilled finger foods rose by 15.2%, chilled quiche by 15.8%, and chilled olives were up 13.3%.

Ball said:

The continued heat across the UK has certainly impacted the way people are eating and drinking. Earlier this summer we saw that mealtimes were being pushed later in the day, with 13% of evening meals now eaten after 8pm. Shoppers have been trying to stay cool this month, with soft drinks growing 15.1% in spend, while the freezer aisle saw shoppers stocking up on ice cream, sorbet and frozen fruit to beat the heat.

Philip Shaw, chief economist at Investec, noted that the level of job vacancies now stands at its lowest level since April 2021. He added:

A brighter spot was that the rate of youth unemployment came down to 16.2% in June. This is relatively good news, but the data are volatile and so we would perhaps not place too much weight on one month’s data. Moreover of course this is a high level, which has climbed by over 2.5 percentage points over the past two years.

Pat McFadden, the UK’s work and pensions secretary, said:

It’s encouraging to see signs of progress in the latest figures, with employment on the up and a continued fall in unemployment rate.

He said the government had put in place reforms to overhaul the benefits system and to support people to find work, including a youth jobs grant to encourage businesses to hire young people.

We will continue to reform welfare and employment support so that more people can live independently and restore opportunity across the country.

James Smith, developed markets economist, UK at ING, said the cooling labour market means there is no need for the Bank of England to raise interest rates, unless there is a “severe and prolonged spike” in energy prices as a result of the Middle East war.

He has crunched today’s numbers.

If the UK economy really is picking up speed – as last week’s GDP data tentatively hints – then there’s little sign of it in the jobs market.

Admittedly, just like the growth figures, it really depends on where you look. Government is still actively hiring, a trend we’ve seen throughout this year. Payroll growth is running at 1.1% on a three-month annualised basis, though we have our doubts over how long this can continue given the more austere plans for public spending coming down the track.

In sharp contrast, consumer-facing industries (hospitality and retail) have been consistently shedding jobs, and if anything, the pace of decline is getting worse. That follows ongoing pressure since last year’s tax and minimum wage hikes. The remainder of the private sector is flatlining – and apart from last week’s more optimistic KPMG/REC hiring survey, most other surveys don’t point to any sign of an imminent upturn.

That disconnect is clearly visible in wage growth. Pay is rising by 6.1% across government, compared to just 2.8% in the private sector. Admittedly, that latter figure is being slightly depressed by “compositional” effects, something the BoE is keen to point out.

Still, the basic story here is that the jobs market is cool. We can see that in the vacancy numbers, which are still gradually falling and are well down on pre-Covid levels. We can see that in the unemployment rate, notwithstanding the latest reliability issues. And crucially for the Bank of England, there is little sign that wage growth is about to turn higher.

Barring a severe and persistent spike in energy prices, we think the Bank will keep rates on hold until next spring, before cutting rates at least twice in 2027.

Good morning, and welcome to our rolling coverage of the global economy, the financial markets, the eurozone and business.

Oil prices have risen, trading above $90 a barrel, as hopes faded for a permanent deal to end war in the Middle East and a ceasefire between the US and Iran ended, heightening fears about energy supplies.

Iran will shift ⁠to a “fully offensive“military stance as efforts have stalled towards a permanent end to the war, a senior Iranian official told Reuters on Monday, as Washington ruled out extending their temporary ceasefire ⁠pact.

Brent crude futures climbed 0.8%, to $91.60 a barrel, the highest since 30 July.

US West Texas ‌Intermediate crude futures were up ‌75 cents at $85.25 a barrel, after hitting $85.37, the highest ‌since 31 July.

Wage growth in the UK has slowed amid a cost of living squeeze, while the unemployment rate dipped slightly, official figures show.

Figures from the Office for National Statistics show average growth in total earnings, including bonuses, fell to 4.1% in the three months to June, down from 4.3% in the three months to May. City economists had forecast a bigger fall to 4%.

Excluding bonuses, regular pay growth ticked up to 3.5% from 3.4%, higher than the 3.4% expected by economists.

Liz McKeown, the ONS director of economic statistics, said the data showed “some softening” in the jobs market despite a broadly unchanged overall picture.

Regular wage growth has remained broadly stable in recent months. However, private sector pay growth has continued to ease, while public sector pay growth remains elevated due to the timing of the latest NHS pay awards.

The UK’s unemployment rate remained at 4.9% in the three months to June. The number of job vacancies remain on a downward trend, falling 6,000 to 707,000 in the three months to July.

Felix Feather, economist at the fund manager Aberdeen, said:

Today’s labour market figures continue to point to a softening UK jobs market.

Regular private-sector pay growth, which is closely watched by Bank of England officials, eased to 2.8% from 2.9% previously. Meanwhile, the more timely indication from PAYE payroll data showed employment fell again, this time by 13,000.

Broadly, the labour market has been loosening for some time. Hiring activity has softened, vacancies have trended lower, and businesses continue to face a challenging demand environment.

This underlines our expectation for the Bank of England to be on hold for the rest of the year. Still, we expect inflation will jump at tomorrow’s reading, due to the recent uplift in the energy bill price cap, challenging the impression of domestically generated disinflation reflected in the recent dataflow.

The Agenda

• 10am BST: Eurozone and Germany ZEW confidence for August

• 1.30pm BST: US Housing starts for July