Key events
Introduction: Oil prices rise as US-Iran ceasefire ends; UK wage growth slows amid cost of living squeeze
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 deal to end war in the Middle East, 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 dipped to 4.9% in the three months to June from 5% in the previous three months. The number of job vacancies fell 7,000 to 712,000.
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
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9.30am BST: UK Private rents and house prices for August
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10am BST: Germany ZEW confidence for August
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1.30pm BST: US Housing starts for July
