Weak UK jobs market holds steady as new PM takes office

The British central bank is closely watching whether the energy price jump caused by the Iran war is turning into longer-term inflation pressures in the economy.

Financial markets on Monday showed that one or possibly two 0.25 percentage-point interest rate hikes were priced by the end of 2026.

"Today’s data reinforces the case for the Bank of England to keep interest rates on hold, with labour market conditions remaining soft and private sector wage growth continuing to ease," Yael Selfin, chief economist at KPMG, said.

"Private sector wage growth is now running below levels consistent with the Bank's inflation target, providing further evidence that domestic wage pressures are contained."

Andy Burnham became Britain's new prime minister on Monday - capping a campaign that ousted Keir Starmer from Downing Street - and on Tuesday his government announced measures to lower domestic power bills in an attempt to ease the cost of living.