19 August 2026: Burnham to delay the North Sea decision for months

The UK job market remains subdued as rising costs weigh on recruitment, with vacancies falling to their lowest level outside the pandemic in nearly 12 years, official figures have revealed.

Vacancies fell by 6k to 707k in the three months to July, their lowest level outside the pandemic since September to November 2014, when they stood at 703k, according to the Office for National Statistics’ latest labour market data.

The employment rate rose slightly by 0.1% for the three months to June, while the number of paid employees fell by 78,000 over the year to June.

The stark reality for employers is that the labour market is showing “very little sign of change”, with forward-looking data indicating this trend is set to continue.

The ONS said feedback from its survey suggested some small firms may not be recruiting because of rising labour costs and other operating expenses.

Employer confidence remains “at an unprecedented low”, putting pressure on the government to stimulate the economy and encourage job growth. The labour market needs confidence, and currently small businesses are still being asked to do a lot with very little room to manoeuvre.

Maxine Bligh, Chief Membership and Innovation Officer at the Recruitment and Employment Confederation, commented that the jobs market needed “a confidence boost to get momentum going”, adding that “many employers are still worried about the cost of hiring and rising operating costs”.

Alongside falling vacancies and payroll numbers, unemployment remained higher than a year earlier.

The UK unemployment rate for people aged 16 years and over was estimated at 4.9 percent in April to June 2026, up 0.2% on the year but down 0.1% on the latest quarter.

Economic inactivity amongst people aged 16 to 64 remained broadly unchanged at 20.9%.

Ben Harrison, director of the Work Foundation at Lancaster University, said the UK remained “trapped in a deepening jobs drought”, with youth unemployment among 16 to 24-year-olds at 16.6% and almost three-quarters of a million young people out of work and looking for a job.

The decline in starter jobs has been “1.6 times faster than for other vacancies” over the past year, he said, making it harder for young people to get their first foothold in work.

The Government must make creating good jobs “in every postcode” a central economic priority, he added, calling for it to deliver on the Employment Rights Act.

Sector experts commented: “These ONS figures show unemployment remains elevated, while businesses continue to deal with rising costs, increased regulation and ongoing economic uncertainty. If Andy Burnham wants businesses to hire, he needs to make it easier.”

Meanwhile, Andy Burnham is about to make one of his first major energy decisions as Prime Minister: whether to approve two of the UK's largest undeveloped North Sea oil and gas fields.

Public consultations on the Rosebank and Jackdaw sites have now closed, and Burnham and Energy Secretary Miatta Fahnbulleh must make the final ruling.

The Prime Minister has said he will take a “pragmatic” approach to the projects and is believed to be considering approval of the Jackdaw gas field.

The decision has sparked strong feelings on both sides: the oil and gas industry and the Conservatives support opening the fields, while climate campaigners and some of Labour's own MPs oppose it.

Jackdaw is a gas field under the bed of the North Sea, 150 miles east of Aberdeen.

If it becomes operational, its gas would feed straight into the UK network, with its developer, Adura, a joint venture by Shell and Equinor, estimating it could heat around 1.4 million homes this winter and cover about 6 percent of UK gas demand.

Because the field produces gas rather than oil, and because the infrastructure to bring it onshore already largely exists, it's generally seen as the more straightforward of the two projects.

Rosebank sits under the sea around 80 miles north-west of Shetland and is the UK's largest undeveloped oilfield, though it would also produce some gas.

Unlike Jackdaw's gas, most of the oil would be shipped abroad for refining, since UK refineries can't process the heavy crude that it produces, before some of it is reimported as finished fuel.

That's why developer, as well as industry bodies such as Offshore Energies UK, tend to base their case for Rosebank on investment and tax revenue, rather than providing energy for British homes.

Rumours have begun to circulate that Burnham is considering delaying the decision for several months. It is felt that a decision so vital to the entire fabric of UK energy policy must be “right rather than quick”.

The pound was broadly flat to slightly softer on major FX crosses yesterday, with GBP/USD edging up only marginally while several other pairs showed small declines. The move was driven mainly by the softer UK labour‑market backdrop and a firmer US dollar, rather than any strong domestic catalyst.

Inflation releases and several supplementary price-pressure indicators dominate today’s UK data slate. These are high-impact data for GBP markets and will shape near-term Bank of England expectations.

US industrial production rose for a second consecutive month in July, driven by continued strength in manufacturing tied to business investment.

The 0.2% advance in production at factories, mines and utilities followed an upwardly revised 0.3% rise a month earlier, Federal Reserve data showed yesterday.

Factory output, which accounts for three-fourths of total industrial production, advanced 0.2% after an upwardly revised 0.3% gain a month earlier, despite a drop in auto manufacturing output.

Output at utilities increased in July by the most in three months, while mining also rose.

The report adds to signs of momentum in manufacturing, with resilient consumer demand and solid capital spending, especially that related to the artificial-intelligence buildout. In the second quarter, manufacturing rose at the fastest annual rate since 2021, the Fed’s data showed. The sector has remained strong despite rising input costs and supply challenges tied to the war in Iran.

At the same time, factories still face rising input costs and supply challenges tied to the conflict.

Following another disappointment in existing home sales in July, weak homebuilder sentiment, and plunging housing starts, pending home sales tumbled for the second month in a row in July, down 2.3% MoM vs 0.0% exp, well below the worst market forecast, dragging sales down 2.5% YoY, the biggest annual drop since April 2025.

This decline matches the second-worst reading in data back to 2001. The highest mortgage rates of the year hit right in the middle of summer, and that’s pulling back contract completions.

Investors’ concerns about a range of issues, from inflation to hefty government deficits, are driving a bond market sell-off, creating a headache for policymakers and pushing up borrowing costs for governments and consumers. The 30-year U.S. Treasury yield hit 5.34% yesterday, its highest level since 2007.

The 10-year yield reached 4.74%, hovering near the highest level of President Donald Trump’s second term. Bond yields rise when prices fall. Investors are selling bonds, pushing prices lower and sending yields higher.

Bond yields help set interest rates across the economy. The 10-year yield influences mortgage rates, auto loans, and business loan rates. Higher yields tighten financial conditions, which can weigh on consumers and restrict business investment. Bond yields across economies are surging to their highest levels in years as investors reckon with a mix of factors, from stubborn inflation to rising government deficits to a wave of new corporate debt issuance.

Trade experts say that if new U.S. tariffs of up to 50% are enacted later today, consumers in Canada will likely feel the impact as higher costs for goods crossing the border ripple through the economy.

“If you’re an American manufacturer, you don’t want to be paying 50% on any sort of machine parts or anything like that that you’re bringing in,” says Joy Nott, partner of trade and customs at KPMG Canada.

Consumers are at the shop shelf with their wallet in hand, deciding whether to buy that product. So manufacturers have to find the sweet spot between recovering costs and staying profitable, without losing customers. It’s a give-and-take situation.

Tariffs are essentially taxes paid on imported products, meaning U.S. tariffs on Canadian imports are ultimately borne first by American businesses and consumers. President Trump launched a trade war in March 2025 with sweeping tariffs on imports from virtually all countries, including Canada, targeting specific Canadian sectors such as steel and aluminium, forestry and lumber products, and the automotive industry.

Trump’s latest round of tariffs targets Canadian dairy products, alcoholic beverages, and additional automotive and parts tariffs, citing what the administration called Canada’s “discriminatory” trade practices in each sector.

The dollar weakened broadly yesterday, with the Dollar Index drifting near two-month lows and most major pairs showing USD softness. Multiple market reports say softer US macro data, reduced expectations of Fed hikes, and unwinding of long-USD positions drove the move.

The key U.S. data scheduled for release today is light but market-relevant, centred mainly on energy inventories and Federal Reserve communications. These releases can influence USD sentiment through oil-price channels and monetary-policy expectations.

Eurozone inflation at 3% remains too high, despite appearing modest compared with previous levels, European Central Bank Chief Economist Philip Lane said in a speech yesterday.

Lane told an event in Ireland that current inflation sits a full one percent above the ECB’s 2% target. While this may seem small compared with the double-digit inflation rate reached in 2022, it represents a significant deviation, given how policy rates are typically adjusted in response to economic shocks.

The ECB officials' comments highlight the Central Bank’s continued focus on bringing inflation down to its target level.

Lane pushed back against the idea that the ECB should refrain from raising interest rates because of the burden on mortgage borrowers, saying that tolerating excessively high inflation as a consequence would be a "false economy."

Asked in an interview on Irish radio station RTÉ Radio 1 whether he expected another interest rate increase by the end of the year, Lane declined to give a forecast, saying the ECB's decisions depend on what is required to return inflation to its 2% target and on the strength of economic activity.

German investor sentiment rose more than expected to 34.2 points in August, according to the ZEW economic research institute, as positive quarterly results and export orders helped offset the effects of high energy prices and transport disruptions.

Analysts polled by Reuters had expected the reading to rise to 30.0 points from 26.3 points a month earlier.

"The positive trend in expectations further consolidated in August, likely due to the good quarterly results and the recent high level of exports," said ZEW President Achim Wambach.

A ZEW survey of views on the current economic situation improved to -61.1 points from -77.6 in July, also beating expectations.

The results were based on responses from 185 analysts and institutional investors collected between August 10 and 17.

Wambach said the economy had benefited from Federal Government infrastructure spending, but record-low water levels on the Rhine River posed a risk to economic activity.

Spain’s “Misery Index,” as measured by Bloomberg at 13.7, is worse than that of Greece at 11.4, Portugal at 8.64, the European Union at a composite 8.9, and the Eurozone at 9.2. The Misery Index is a simple economic indicator that measures the economic discomfort or stress felt by the average citizen in a country. American economist Arthur Okun created it in the 1970s, and it is calculated by adding two key variables: unemployment and inflation.

The higher the score, the greater the economic “misery”; for example, if a country has 10% unemployment and 4% inflation, its misery index is 14.

It reflects the worst-case scenario for a consumer: not having a job while the cost of living continuously rises at the same time.

The euro strengthened yesterday, with EUR/USD up about 0.22% to 1.1593, signalling broad U.S. dollar weakness rather than euro‑specific strength. The move pushed the euro near a two-month high, supported by softer U.S. macro data and lower expectations of a near‑term Fed rate hike.

The eurozone has a busy, high‑impact data slate today, centred on inflation, balance of payments, and labour‑market indicators. These releases come from Eurostat and the European Central Bank, and several are directly market‑moving for EUR.

Have a great day!