UK Labor Market Weakens as Inflation Rises Amid Energy Price Surge

The UK labor market is showing signs of weakness, with job vacancies reaching a five-year low and employers shedding more workers in July.

UK inflation accelerated in July after energy bills surged, ending a short period of respite for hard-pressed British households. Consumer prices rose 2.9% from a year earlier, up from a 15-month low of 2.6% in June.

The jump largely reflects a 13% rise in the price cap that sets household energy bills. Services inflation, a gauge of domestic pressures watched by the Bank of England, cooled to 3.4% from 3.6% with airfares driving the decline.

In contrast, private-sector activity in the euro area unexpectedly improved slightly in August, thanks to the strongest manufacturing growth in more than four years.