UK Macro Daily(Beta Mode)
UK CPI Rises to 2.9% as Retail Sales Slump
Market Snapshot
| Asset | Level | Change |
|---|---|---|
| FTSE 100 | 10,757.12 | +0.13% |
| FTSE 250 | 24,508.70 | -0.55% |
| GBP/USD | 1.36 | +0.33% |
| GBP/EUR | 1.17 | +0.11% |
| GBP/JPY | 216.78 | +0.71% |
| Brent Crude | 93.18 | -0.64% |
| Gold | 4,609.50 | +2.06% |
| UK Nat Gas | 2.76 | +1.10% |
| Bitcoin | 75,470.09 | +8.96% |
| 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 |
| CBI Industrial Trends Orders Level | -45 | -40 | -25 |
| GfK Consumer Confidence | -17 | -18 | -14 |
| Retail Sales Month-over-Month | 1 | -0.50 | -0.50 |
| Retail Sales Year-over-Year | 4.20 | 2.20 | 1.60 |
Brent Crude Oil (3mo) | Type: market_hloc | USD per Barrel: 93.2 (2026-08-21) | Range: 71.57–103.5 | Trend(5pt): 102.6,83.17,76.3,90.12,93.2
Today's Economic Events
| Data | Prior | Cons | Time |
|---|---|---|---|
| S&P Global Manufacturing PMI Flash | 51.90 | 51.50 | 00:30 |
| S&P Global Services PMI Flash | 52.10 | 51.80 | 00:30 |
- UK CPI rose to 2.9% y/y in July, matching consensus but above prior 2.6%, driven by energy costs.
- Retail sales fell 0.5% m/m and 1.6% y/y, missing forecasts and signalling consumer weakness.
- GfK consumer confidence improved to -14 while CBI orders beat expectations at -25.
Yesterday's Recap
UK data releases showed inflation accelerating to 2.9% y/y alongside a 0.3% m/m rise, with core inflation steady at 2.6%. Unemployment held at 4.9% while employment growth slowed sharply to 83,000. Average earnings growth eased to 4.1% y/y.
Retail sales contracted 0.5% m/m and 1.6% y/y, underperforming forecasts. GfK consumer confidence rose to -14 and CBI industrial orders improved to -25. Markets reacted with the FTSE 100 edging up 0.13% to 10,757.12 while the FTSE 250 fell 0.55%.
Sterling strengthened, with GBP/USD climbing 0.33% to 1.36 and the 10-year gilt yield declining 2.95% to 4.80%. The Bank Rate remained at 3.73%.
The Day Ahead
Markets await the S&P Global Manufacturing and Services PMI flashes due at 00:30 ET, with consensus pointing to modest cooling from July readings of 51.9 and 52.1. No other high-impact UK releases are scheduled. Traders will monitor any early reactions in sterling and short-dated gilts to the PMI prints.
BoE speakers remain absent from the calendar. Focus stays on whether services activity holds above 50 and whether manufacturing momentum fades further. The 10-year gilt yield stands at 5.07%.
Other Economic Notes
Stronger-than-expected GfK confidence and CBI orders suggest resilience in household and business sentiment despite softer retail sales. Energy-driven inflation pressures persist, keeping the 2.9% y/y print above the prior month and complicating the path to target. Labour-market cooling appears gradual, with unemployment stable at 4.9% and pay growth moderating.
Gilt markets priced reduced rate-cut expectations after the inflation surprise, while sterling benefited from the data mix. The verified Bank Rate of 3.73% anchors steady policy expectations.
Global Macro News
US-Canada trade talks neared completion, supporting risk sentiment across currencies including sterling. German economic recovery faces headwinds from low river levels that disrupt industrial transport. <i>↓ p.2</i>
