ISSUE NO. 56 · WEDNESDAY 21 OCTOBER 2026

Vacancies under 700,000 for the first time since 2021, capital gains tax spared, and French yields at their widest over Germany since 2012

UK vacancies have fallen below 700,000 for the first time since April 2021. Rate-setters have spent weeks warning that energy prices could force a rise next month; a labour market this slack pulls hard the other way, because people with fewer openings to chase cannot bid their wages up.

The Chancellor has been narrowing his own options, ruling out one tax rise and leaving the banks as the obvious place to look a week today. Britain spent Monday as the calm corner of Europe’s bond market, which says more about France than us.

Below: the data the Bank will read twice, a reprieve for investors, a sell-off that stopped at the Channel, four numbers, the diary and one calculator.

Lead

Openings fell by 21,000 in three months and pay growth cooled with them, days after rate-setters warned of a rise.

The ONS put vacancies at roughly 691,000 in the three months to September, down 21,000, and its labour market deputy director David Freeman called it the steepest fall this year. Small firms did most of the cutting, blaming labour costs. Regular earnings growth came in at 3.7%, a shade above the 3.6% expected; including bonuses, pay also grew 3.7% and slowed. Unemployment edged down to 4.7%. Martin Beck of WPI Strategy reads it as a drawn-out squeeze rather than a crisis. For the Bank, softer pay means less risk of second-round effects — and Huw Pill, its most hawkish voice, has already asked aloud whether four rises are really needed. Read the full story →

The Numbers

Four numbers. Bank Rate and the last CPI print are where the Bank starts, the index gave back a chunk on Monday, and the fourth is the figure that may settle the argument.

More News

Investors can stop bracing: Healey has turned down his own Cabinet’s push to raise capital gains tax, and the lenders are next in line.

Louise Haigh and Wes Streeting were among the ministers pressing for a rise from the 24% higher rate, and Treasury sources say Healey refused on fears that high earners would leave. The Treasury had already rejected aligning the 18% and 24% rates with income tax at 20% and 40%. Lord Jim O’Neill warned it would send business the wrong message; Andy Burnham has reminded the government it has already raised £70bn. With VAT, National Insurance and income tax ruled out by the manifesto, the list is short. The banking surcharge, cut from 8% to 3% in 2023, is understood to be on the table, and reversing it would raise about £2bn a year. Read the full story →

France turned street unrest into a bond-market problem on Monday, and the spread over Germany closed at its widest since early 2012.

Paris ordered partial curfews as protests over fuel prices and schools turned into riots, with Prime Minister Sébastien Lecornu blaming the ultra-left. The 10-year French yield rose around 13 basis points to 4.9%; Italy’s rose 10. Andrew Kenningham of Capital Economics thinks France is heading for a fiscal crisis that could drag the euro-zone into recession, though he rates the contagion risk well below the 2010s. Britain’s 10-year gilt moved just over four basis points. Richard Carter contrasts that calm with the pressure on French paper, while David Morrison of Trade Nation expects oil, Brent above $108, to keep pushing the wrong way. Read the full story →

On the Diary

• Wednesday, 7.00am BST — Consumer price inflation, September. Out as this lands. Forecasts point to 3.4%, and the November vote turns on it.
• Wednesday, 7.00am BST — Public sector finances, September. What he borrowed last month, a week before he stands up.
• Wednesday, 9.30am BST — Private rent and house prices, October. Rents and prices together, with mortgage costs climbing.
• Thursday, 9.30am BST — Employee earnings in the UK, 2026. The annual pay distribution, detail a monthly average cannot carry.

The Toolbox

One tool from the site each issue, picked to fit what has just happened. Free, no sign-up, and it shows its workings.

Mortgage Repayment Calculator

“The argument on the committee is a quarter of a point, on 5 November. This works out what a mortgage costs at a given rate, balance and term, so you can price that quarter-point yourself.”

The Close

Two of today’s stories are about the same thing: who gets charged for risk and who escapes it. French borrowing costs rose because the streets are on fire; British ones barely moved because they are not. The Chancellor stands up a week today with that calm as his working capital. It was lent, not earned, and a lender can ask for it back.

If something here is wrong, or there is something you want dug into, just reply. It comes straight to me.

MJB