UK Macro Daily(Beta Mode)
UK Inflation Matches Forecasts Amid Steady Jobs
Market Snapshot
| Asset | Level | Change |
|---|---|---|
| FTSE 100 | 10,743.35 | +0.14% |
| FTSE 250 | 24,643.50 | +0.33% |
| GBP/USD | 1.36 | +0.52% |
| GBP/EUR | 1.16 | -0.38% |
| GBP/JPY | 215.80 | -0.08% |
| Brent Crude | 91.89 | +0.29% |
| Gold | 4,539.30 | +1.11% |
| UK Nat Gas | 2.80 | -0.68% |
| Bitcoin | 69,349.14 | +7.22% |
| 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 | 2.90 |
| Core Inflation Rate Year-over-Year | 2.60 | 2.50 | 2.60 |
| Inflation Rate Month-over-Month | 0.10 | 0.30 | 0.30 |
GBP/USD Exchange Rate | Type: market_hloc | Rate: 1.361 (2026-08-20) | Range: 1.317–1.361 | Trend(6pt): 1.34,1.336,1.334,1.335,1.355,1.361
Today's Economic Events
| Data | Prior | Cons | Time |
|---|---|---|---|
| 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 | -0.50 | 22:00 |
| Retail Sales Year-over-Year | 4.20 | 2.20 | 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 |
- July CPI rose to 2.9% YoY, matching consensus and lifting the four-month high.
- Unemployment stayed at 4.9% while employment growth slowed to 83,000.
- Sterling advanced and gilt yields eased as markets priced a later BoE cut.
Yesterday's Recap
UK labour data released on 17 August showed the unemployment rate unchanged at 4.9% while employment rose 83,000, below recent averages. Average earnings growth including bonuses slowed to 4.1% year-over-year, aligning with forecasts and easing wage pressure concerns. Inflation figures published the following day confirmed CPI at 2.9% year-over-year, up from 2.6% and matching the consensus, with the monthly rate printing 0.3%.
Core CPI held at 2.6%, offering the Bank of England limited relief on underlying pressures. Equity markets responded positively, with the FTSE 100 closing at 10,743.35, up 0.14%, and the FTSE 250 gaining 0.33%. Sterling strengthened, lifting GBP/USD to 1.36, while the 10-year gilt yield fell 2.95% to 4.80%.
Markets trimmed near-term easing bets after the data confirmed resilient consumer and price trends.
The Day Ahead
Attention turns to retail sales and flash PMIs due 20-21 August. Retail sales are expected to contract 0.5% month-over-month after July’s 1.0% gain, with the year-over-year rate forecast at 2.2%. The S&P Global manufacturing PMI flash is projected at 51.5 and services at 51.8, both slightly below prior prints.
GfK consumer confidence is seen at -18, while the CBI industrial trends orders level is expected to improve to -40. These releases will test whether consumer momentum persists and whether services activity is losing steam. Sterling and short-dated gilts will lead price action on any surprises.
Other Economic Notes
UK growth faces a constrained backdrop with persistent services inflation and energy bill surges limiting household spending power. Societe Generale notes that global conflict risks keep the inflation outlook uncertain and reduce the scope for early Bank of England easing. Fiscal rules reiterated by the Chancellor continue to anchor gilt markets, limiting borrowing concerns.
Broader data show producer prices also rising, reinforcing the view that cost pressures remain embedded. Markets now see the first 25 basis point cut no earlier than November, with the terminal rate around 3.73% by mid-2027.
