UK inflation holds steady, while jobs data beats forecasts

UK inflation data released yesterday showed prices rose by 2.6% last month, just below analysts’ expectations of 2.7%. The rise in food, clothing and household goods prices was offset by the 1.3% fall in fuel prices. Meanwhile, wage growth for the second quarter rose to 2.1%, above estimates of 2%, while unemployment came in better than forecast at 4.4%. This helped to dampen the concerns about a deterioration in living standards in the UK, which was highlighted in data released showing a fall in UK consumer spending in July for the third consecutive month, according to analysis of Visa card payments. The weaker-than-expected data on Tuesday sent the pound to its weakest level against the euro since October and to a five-week low against the dollar. The positive data released today is helping to lift the currency from these lows. In contrast, the American consumer remains healthy, with US retail sales in July rising the most in seven months, sparking a rally in the US dollar.