The impact of soaring energy prices can already be seen in macroeconomic data: Consumer spending rose by only 0.6% in September versus 3% in August.
However, there are also bright spots for the U.K. economy. Figures from the Office for National Statistics show that the jobless rate fell to 4.5% in the three months to August, which is 0.4 percentage points lower than the previous quarter. But this only reinforced expectations of a rate hike. On the other hand, the surge in pay growth seen in the second quarter is slowing. Weekly earnings rose by 7.2% in the third quarter, down from 8.3% in May-July.
In this context, London's FTSE 100 index was down this morning, weighed down by mining and banking stocks, which are suffering from higher energy prices, supply chain disruptions and what looks like another debt payment soon to be missed by China Evergrande.
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