UK Macro Daily(Beta Mode)
UK Labour Market Cools Ahead of CPI
Market Snapshot
| Asset | Level | Change |
|---|---|---|
| FTSE 100 | 10,728.04 | +0.07% |
| FTSE 250 | 24,704.40 | -0.66% |
| GBP/USD | 1.35 | -0.03% |
| GBP/EUR | 1.17 | -0.14% |
| GBP/JPY | 215.69 | -0.10% |
| Brent Crude | 91.71 | +0.76% |
| Gold | 4,391.60 | +0.59% |
| UK Nat Gas | 2.79 | +0.40% |
| Bitcoin | 64,130.76 | -0.58% |
| UK 2Y Gilt | - | - |
| UK 10Y Gilt | 4.80% | -2.95% |
Prior Economic Events
| Data | Prior | Cons | Actual |
|---|---|---|---|
| Unemployment Rate | 4.90 | 4.80 | 4.90 |
| Average Earnings Incl. Bonus (3Mo/Yr) | 4.40 | 4.10 | 4.10 |
| Employment Change | 147,000 | - | 83,000 |
| Inflation Rate Year-over-Year | 2.60 | 2.90 | - |
| Core Inflation Rate Year-over-Year | 2.60 | 2.50 | - |
| Inflation Rate Month-over-Month | 0.10 | 0.30 | - |
FTSE 100 Index (3mo) | Type: market_hloc | FTSE 100: 1.073e+04 (2026-08-18) | Range: 1.023e+04–1.091e+04 | Trend(6pt): 1.032e+04,1.025e+04,1.065e+04,1.074e+04,1.072e+04,1.073e+04
Today's Economic Events
| Data | Prior | Cons | Time |
|---|---|---|---|
| Thursday (2026-08-20) | |||
| CBI Industrial Trends Orders Level | -45 | -40 | 02:00 |
| GfK Consumer Confidence | -17 | -18 | 15:01 |
| Friday (2026-08-21) | |||
| Retail Sales Month-over-Month | 1 | -0.30 | 22:00 |
| Retail Sales Year-over-Year | 4.20 | 2.30 | 22:00 |
| S&P Global Manufacturing PMI Flash | 51.90 | 51.50 | 00:30 |
| S&P Global Services PMI Flash | 52.10 | 51.80 | 00:30 |
- Unemployment rate steady at 4.9% with employment growth slowing to 83,000
- FTSE 100 edges 0.07% higher while 10-year gilt yields fall 2.95% to 4.80%
- BoE Bank Rate expected to remain at 3.73% through year-end
Yesterday's Recap
UK labour market data released on 18 August showed the unemployment rate unchanged at 4.9%, matching the prior print but missing the 4.8% consensus. Employment rose by 83,000, well below the previous 147,000 increase, while average earnings growth including bonuses slowed to 4.1% from 4.4%. The softer jobs picture reinforced views that the labour market is cooling gradually.
Equity markets reacted modestly, with the FTSE 100 closing 0.07% higher at 10,728.04 while the FTSE 250 fell 0.66%. Sterling eased across the board, with GBP/USD down 0.03% at 1.35 and GBP/EUR 0.14% lower at 1.17. Gilt yields declined, sending the 10-year yield 2.95% lower to 4.80%.
Brent crude rose 0.76% to 91.71 amid ongoing Middle East supply concerns. Youth unemployment remains elevated at 16.2%, highlighting persistent structural issues despite the headline rate holding steady.
The Day Ahead
Attention turns to Thursday’s CBI Industrial Trends Orders and GfK Consumer Confidence readings, both expected to show modest improvement. Friday brings high-impact retail sales figures for July, with month-on-month growth forecast at -0.3% after June’s 1.0% rise. Flash PMIs for August will follow at 00:30 on Friday, with manufacturing expected at 51.5 and services at 51.8.
Markets will also monitor any further commentary from MPC members ahead of the September meeting. Retail sales and PMI prints together will shape expectations for third-quarter growth momentum.
Other Economic Notes
Cooling labour market conditions are reducing pressure on the Bank of England to consider further tightening. Grocery inflation has slowed to a two-year low, easing cost-of-living pressures for households. The combination of softer employment growth and contained wage gains supports the view that underlying price pressures are moderating.
Policymakers will watch whether these trends persist into the autumn data flow. With CPI at 2.60% in June and unemployment at 4.90%, the committee sees limited need for immediate adjustment.
