Hiring Freeze Looms As Rising Costs And Weak Demand Stall UK Job Market

Oil prices fell in early Asian trading on Monday, extending declines of more than 4% last week on higher U.S. tariffs on its trading partners, an OPEC output hike, and expectations the U.S. and Russia were moving closer to a Ukraine ceasefire pact.Brent crude futures fell 52 cents, or 0.78%, to $66.07 a barrel by 0041 GMT, while U.S. West Texas Intermediate crude futures fell 58 cents to $63.30.

Expectations have risen for a potential end to sanctions that have limited the supply of Russian oil to international markets, after U.S. President Donald Trump said on Friday that he would meet with Russian President Vladimir Putin on August 15 in Alaska to negotiate an end to the war in Ukraine.The news came as the U.S. has stepped up pressure on Russia, raising the prospect that penalties on Moscow could also be tightened if a peace deal isn't reached.Trump set a deadline of last Friday for Russia to agree to peace in Ukraine or have its oil buyers face secondary sanctions, and at the same time is pressing India to reduce purchases of Russian oil.

On top of U.S.-Russia talks, U.S. inflation data on Tuesday will be another key price driver this week, IG market analyst Tony Sycamore said in a note."A weaker-than-expected CPI print would boost expectations for earlier and deeper Fed interest rate cuts, which would likely stimulate economic activity and increase crude oil demand."

"Conversely a hotter print would spark stagflation fears and push back expectations of Fed rate cuts."Trump's higher tariffs on imports from dozens of countries, which took effect on Thursday, are expected to weigh on economic activity as they force rerouting of supply chains and higher inflation.Dragged down by the gloomy economic outlook, Brent fell 4.4% over the week ended Friday, while WTI dropped 5.1%.

Source: Yahoo Finance

Key points:

Australia's central bank has a problem communicating that has injected an element of unpredictability into interest rate policy when global uncertainty is already high, and its proving costly for investors.

It all stems from an April shake up at the Reserve Bank of Australia that shifted rate-setting power entirely to a new nine-member Monetary Policy Board.

At just its second meeting in May, the board decided to cut cash rates by a quarter point to 3.85% and sounded more dovish than analysts expected, even briefly considering an easing of 50 basis points given the uncertainty caused by U.S. tariffs.

This, combined with some soft economic data, led investors to wager heavily on another cut in July while a Reuters poll of 37 economists found 31 expected an easing.

Crucially, investors were encouraged to pile into these positions because the RBA did not push back on expectations, as they had often done in the past.

Imagine their surprise, then, when the MPB held rates steady in a rare spilt decision of six to three, leaving many investors with painful losses.

Speaking to the media after the decision, RBA Governor Michele Bullock explained that the bank could no longer offer guidance because the rate decision was up to the board alone and it could not be pre-empted.

Essentially, the RBA had changed the way it communicates to markets, without telling those markets it had changed.

"Since no single MPB member can front-run the whole Board, future inter-meeting communication is unlikely to endorse or push back against market pricing," said Luci Ellis, chief economist at Westpac and a former assistant governor at the RBA.

"This implies that markets will be surprised more often than in countries like the United States, where the central bank puts more weight on avoiding surprising the market."

RBA A MINORITY ON ITS OWN BOARD

Since then, a benign inflation report now has investors equally convinced the MPB will cut rates to 3.60% at its next meeting on August 12, in part on the hope it would not want to shock twice in a row.

Yet the MPB's unusual composition makes for added uncertainty as it has just two RBA officials, along with a top Treasury official and six part-time external members with backgrounds in economics, business and banking. The latter are appointed by the Treasurer of the day with input from the RBA.

Markets have little to no idea what the views of these six are, and that is unlikely to change as there are only vague plans for each to make one public appearance a year.

It is now quite possible RBA board members could find themselves out-voted on rates, yet the governor would still have to front the media to defend a decision they did not agree with.

And, since the votes are unattributed, there might be times when it would be impossible for investors to know if the central bank had been overturned.

"It's even easier for the governor to be voted down because they're clearly outnumbered by externals members," said Jonathan Kearns, chief economist at Challenger and a former top official at the RBA. "I think the board is probably feeling now more emboldened to disagree with the governor."

"It does add a little bit more risk into things, but it's up to the RBA to provide good analysis and well formulated recommendations that are convincing to the external members."

The new format marks the RBA as something of an outlier in global central banks. The Fed and European Central Bank have boards made up of only central bankers, while the Bank of England has five central bankers and four professional economists on its board of nine.

Votes of individual board members are made public for the Fed and the BoE, which have both become more divided in recent months.

Speaking to an economic forum recently, RBA Deputy Governor Andrew Hauser conceded the July decision was less predictable for markets than it should have been and said the board was still "feeling our way" on policy.

He insisted this unpredictability would not be the new norm, but cautioned there would be "shocks from time to time."

Investors betting on a rate cut are fervently hoping next week will not be one of those times.

Source: TradingView

Australian-listed lithium miners jumped early on Monday, after a major Chinese mine owned by Contemporary Amperex Technology Co. Ltd. suspended production, spurring hopes of wider output curbs as Beijing cracks down on overcapacity across the economy.The lithium industry has been struggling with a global supply glut and slower-than-expected electric-vehicle demand growth. Prices hit a record high in 2022 but have collapsed nearly 90% since them, forcing companies worldwide to rein in spending and delay expansions.

CATL has suspended production at its Jianxiawo mine in China’s Jiangxi province for at least three months, people familiar with the matter said at the weekend. The company’s mining permit for the project had expired on Aug. 9.Shares in PLS Ltd, formerly Pilbara Minerals Ltd., jumped as much as 19%, while Liontown Resources Ltd. surged as much as 22%. Mineral Resources Ltd. was up as much as 12%.

Traders and industry executives are now watching for other mining curbs around China’s Yichun city, which has emerged as a battery-metals hub. A local government department has asked eight miners to submit reserves reports by the end of September, according to notes from brokers and analysts, following an audit that found non-compliance in the registration and approvals process.

“Prices may deviate from reasonable levels in the short term, but CATL’s situation does not change the oversupply structure in the market,” said Zhang Weixin, an analyst at China Futures Co. “However, if production disruption is expanded to other mines in Yichun after Sept. 30, the lithium price level could go even higher.”Citigroup Inc. analysts said they also did not expect the suspension of production at the mine to result in a firm deficit, but said it would “bolster sentiment in the short term.”

Source: Bloomberg Europe

The UK jobs market weakened across the board in July as employers cut their payroll budgets in response to Chancellor of the Exchequer Rachel Reeves’ £26 billion ($34.9 billion) tax increase, according a survey closely monitored by the Bank of England.

Starting salaries rose at the slowest pace in over four years — restrained by an increasing number of job-seekers chasing fewer vacancies, the poll by KPMG and the Recruitment and Employment Confederation showed. Demand for permanent staff contracted the most in five months.

The findings will pile further pressure on Reeves, who is accused of both stifling growth and fanning inflation by hiking employer social-security levies in April alongside another hefty increase in the minimum wage.

The downturn in the labor market allowed the BOE to reduce interest rates to a two-year low on Thursday but doubts are growing over whether officials can cut again this year as firms pass on higher costs to consumers.

The KPMG-REC survey is one of several private labor market readings being tracked by the BOE in the absence of reliable official statistics, which have been affected by a sharp decline in response rates.

Employers last month offered new joiners the smallest pay increases since early 2021, the poll of recruitment agencies found. Candidate numbers were swollen by recent firings and workers trying to flee jobs at risk of being cut.

At the same time, vacancies for permanent work dropped at the fastest pace since February, with companies citing higher payroll costs, proposed stricter employment laws and fears of further tax increases in the budget later this year. The decline in hiring was pronounced in the labor-intensive retail and hospitality sectors.

“Many firms will continue to pause major investment decisions until there is greater clarity in the autumn,” said Jon Holt, group chief executive at KPMG UK.

The survey chimes with a separate report from the Chartered Institute of Personnel Development showing that only 57% of private-sector employers plan to hire staff in the next three months, down from 65% in autumn 2024.

Policymakers will get a fresh read of the labor market when the latest official unemployment data are published on Tuesday. The jobless rate is expected to remain at a four-year high of 4.7% in the three months through June, according to economists surveyed Bloomberg. The BOE expects it peak at just under 5% this year.

Officials are closely watching for signs that weaker demand for staff is translating into cooler pay growth, a key indicator of underlying price pressures.

After cutting interest rates for a fifth time, they are now shifting their focus to a resurgence in inflation that is expected to peak at 4% in September. Although the increase is being driven by volatile food and energy, it risks feeding wage demands that in turn push up prices.

Recruiters surveyed by REC said pay pressures for permanent postings eased across most UK regions except for the North of England. Wage inflation for temporary jobs, which have been less affected by the increase in national insurance contributions, also slowed to a five-month low.

“Economic uncertainty, the complexities of AI adoption and global headwinds are all weighing on business planning,” Holt said.

Source: Bloomberg Europe

Eight people were killed and two others were injured in a shooting outside a nightclub in southwestern Ecuador, police said Sunday.Police Colonel Javier Chango told a press conference that seven people died at the scene, and another died in the hospital.The attack took place in Santa Lucia, a town with a population of 38,000 in the Guayas — one of the four provinces under a two-month state of emergency decreed earlier this week by President Daniel Noboa to combat gang violence.

What else do we know about the shooting?

Chango explained that the gunmen arrived in two pickup trucks and opened fire on the crowd drinking outside the Napoles nightclub at 1:15 am local time (0615 GMT).After the attack, they fled along an "unknown route," Chango said. Police also found 800 cartridge cases at the scene.Among the dead was the nightclub owner Jorge Urquizo, the brother of Santa Lucia's mayor.The police have not determined a motive for the shooting."We are open to all hypotheses; we can't rule any out yet," said Chango.

Ecuador closed the first half of 2025 with 4,619 homicides — a 47% increase compared to the same period last year.

Source: DW

Key Points:

US National Debt and Its Implications

The United States has hit a record-breaking national debt of $37 trillion, with substantial increases linked to government spending and legislative changes as of August 2025.This surge threatens financial stability and could influence safe-haven asset flows, impacting cryptocurrencies like BTC and ETH, amid macroeconomic concerns worldwide.The US national debt reached an unprecedented $36.99 trillion as of August 2025, nearing the $37 trillion threshold. This rise is attributed to government spending and recent legislative measures.

Key figures driving this include the US Treasury and fiscal policies under President Trump. The "One Big Beautiful Bill Act" has been noted to contribute significantly.Market impacts include rising interest payments, now surpassing Medicare and defense budgets. Macro stability concerns are heightened with these spending levels.The debt surge poses economic implications, with mounting challenges for long-term investments and potential effects on the crypto market. A nation saddled with debt will have less to invest in its own future.

Historical debt crises show potential for crypto as a financial hedge. Past trends suggest BTC and ETH may benefit from risk-off shifts.Future regulatory, economic, and technological shifts remain uncertain, but current trajectories suggest escalating debt burdens may pressurize government fiscal policies further.

Source: CryptoSlate