Cooling UK labour market ‘questions need’ for Bank of England rate hikes; grocery inflation slows to two-year low – business live

Brent crude climbs above $91 a barrel as US-Iran ceasefire ends Grocery inflation in the UK has slowed to the lowest rate in almost two years, bringing some relief to households, a monthly survey shows (ahead of tomorrow’s official inflation data). Inflation at supermarkets and other grocers eased for a fifth month, to 2.1% in the four weeks to 9 August – the lowest since October 2024, according to Worldpanel by Numerator. With inflation slowing again, this marks the fifth consecutive month of easing prices. Shoppers are feeling the relief with 39% now feeling financially comfortable, marking the highest level of financial confidence since November 2021. But it’s by no means the same picture for all, with 20% reporting that they are struggling, and this has a clear impact on spending decisions. Among these households, 30% are more likely to prioritise grocery essentials over additional summer spending such as holidays and travel. The continued heat across the UK has certainly impacted the way people are eating and drinking. Earlier this summer we saw that mealtimes were being pushed later in the day, with 13% of evening meals now eaten after 8pm. Shoppers have been trying to stay cool this month, with soft drinks growing 15.1% in spend, while the freezer aisle saw shoppers stocking up on ice cream, sorbet and frozen fruit to beat the heat. A brighter spot was that the rate of youth unemployment came down to 16.2% in June. This is relatively good news, but the data are volatile and so we would perhaps not place too much weight on one month’s data. Moreover of course this is a high level, which has climbed by over 2.5 percentage points over the past two years. It’s encouraging to see signs of progress in the latest figures, with employment on the up and a continued fall in unemployment rate. We will continue to reform welfare and employment support so that more people can live independently and restore opportunity across the country...