Independent Treasury Economic Model forecasting group (EY ITEM Club)
The ONS has shown wage growth in the private sector has slipped below 3% for the first time since 2020, with three-month vacancies dropping to 712,000. Unemployment remains at 4.9%, payroll numbers fall slightly, and market signals suggest softening conditions ahead as pay growth in the public sector keeps overall earnings above inflation.
Retail sales volumes have fallen again in July, led by non-food and clothing sectors, while food and drink have bucked the trend thanks to hot weather and World Cup excitement. The Official Statistics Office says promotions were pulled forward into June, reducing July gains. The three-month trend remains positive, but the high street faces momentum challenges into autumn.
August PMIs have shown UK services and manufacturing have expanded while construction has contracted sharply; Saudi business confidence has held above the 50 threshold and strengthened in industry and services; Chinas official manufacturing PMI has hovered just below 50, signaling weak but stabilising activity. Surveys point to resilient demand offset by housing weakness and higher energy costs.