Cooling UK labour market ‘questions need’ for Bank of England rate hikes; grocery inflation slows to two-year low – as it happened
Guardian AU Business
•Tue, 18 Aug 2026 15:10:55 GMT
📰 What Happened
This Guardian business live blog covered a cooling UK labour market that economists said questions the need for further Bank of England rate hikes, alongside news that UK grocery inflation slowed to 2.1 percent, its lowest in two years. It also tracked youth unemployment down to 16.2 percent but still at a high level, and Brent crude climbing above $91 a barrel as a US-Iran ceasefire ended.
🔍 The Backstory
The Bank of England had been tightening policy in response to persistent price pressures and a cost-of-living squeeze, and interest rates were at multi-year highs. A softening jobs market and easing grocery inflation reduce inflationary pressure, while a renewed rise in oil prices and government borrowing costs to decade highs add upward price pressure - a mixed picture for the central bank.
🎯 Why It Matters
The signals are pivotal for the Bank of England's near-term interest-rate decisions, which in turn affect mortgage costs, borrowing and household finances across the UK. A cooling labour market, slower food inflation and renewed energy-price rises outline the competing forces shaping the British economy's path.
This Guardian business live blog covered a cooling UK labour market that economists said questions the need for further Bank of England rate hikes, alongside news that UK grocery inflation slowed to 2.1 percent, its lowest in two years. It also tracked youth unemployment down to 16.2 percent but still at a high level, and Brent crude climbing above $91 a barrel as a US-Iran ceasefire ended.
The Bank of England had been tightening policy in response to persistent price pressures and a cost-of-living squeeze, and interest rates were at multi-year highs. A softening jobs market and easing grocery inflation reduce inflationary pressure, while a renewed rise in oil prices and government borrowing costs to decade highs add upward price pressure - a mixed picture for the central bank.
The signals are pivotal for the Bank of England's near-term interest-rate decisions, which in turn affect mortgage costs, borrowing and household finances across the UK. A cooling labour market, slower food inflation and renewed energy-price rises outline the competing forces shaping the British economy's path.