11th September 2026
The UK Economy Is Sending Mixed Signals – And Oil Could Make Things Worse
The latest real-time indicators from the Office for National Statistics provide a useful glimpse of the UK economy before the more familiar official statistics eventually catch up.
They do not point to an economy in recession. Nor do they suggest that everything is going well.
Instead, they show an economy sending rather mixed signals, with some areas improving while others remain under pressure. And there is now an additional complication that was not fully visible in some of the earlier data: energy prices are rising again as the Middle East conflict disrupts energy markets.
The ONS describes these figures as experimental statistics, using rapid-response surveys, administrative information and other near-real-time sources. They should therefore be treated with some caution. But their value is that they can reveal changes before they appear in conventional economic statistics.
One of the more encouraging signs is consumer activity. Retail footfall had strengthened, and card spending was showing resilience. In July, UK retail footfall was 4% higher than a year earlier, while Revolut debit-card spending was 6% higher than a year earlier across its measured categories. That suggests consumers had not simply stopped spending.
But another indicator gives a rather different impression of household finances.
The proportion of Direct Debits failing increased from 2.3% in July 2025 to 2.4% in July 2026. The failure rate for loans rose from 4.6% to 5.1%.
That is not evidence of a household financial crisis, but it is a reminder that the cost-of-living problem has not disappeared simply because headline inflation has fallen from its earlier peaks.
The employment picture is similarly mixed.
New online job adverts increased during July compared with June, while potential redundancies fell. That sounds positive. Yet the number of new job adverts was still 4% lower than a year earlier, and Scotland recorded a 10% annual fall in online job adverts.
This is an important distinction. The labour market can remain relatively strong while the demand for new workers is weakening.
The economy therefore appears capable of maintaining employment without generating the same level of new opportunities.
Housing provides another interesting signal.
New property listings for sale fell by 6% compared with July 2025, while the average property remained on the market for 68 days. Scotland was actually performing rather better than much of Britain, with an average time on the market of just 37 days.
That suggests the housing market has not seized up, but neither is there evidence of a major surge in activity. Buyers and sellers appear to be operating cautiously.
The most significant warning, however, may be sitting in the energy figures.
By July, wholesale gas prices were already 59% higher than a year earlier and the UK electricity system price was 34% higher. Gas prices rose another 18% during July, while electricity increased 9%.
And those figures came before the latest acceleration in oil prices.
The ONS specifically linked the increase to renewed disruption around the Strait of Hormuz and the wider Middle East conflict.
This is where the latest information becomes particularly important.
Britain was already dealing with an economy showing modest growth, relatively weak recruitment and continuing pressure on household finances. It is now facing another potentially substantial energy shock.
Oil moving above $100 a barrel does not simply mean more expensive petrol.
It raises the cost of transporting goods, manufacturing, heating, agriculture and almost every activity that depends directly or indirectly on energy.
That could put the Bank of England in a difficult position.
If the economy weakens, there is an obvious argument for lower interest rates. But if energy prices push inflation higher, the argument goes in the opposite direction.
This is the uncomfortable possibility of stagflation: an economy that is not growing strongly while inflation remains stubbornly high.
The latest ONS figures do not prove that Britain is heading towards stagflation. It would be far too early to make such a claim.
But they show why the possibility should not be dismissed.
There is also a wider financial-market issue.
Government bond yields have been rising sharply around the world, while investors have become increasingly concerned that central banks may have to keep interest rates higher for longer, or even raise them again, if the energy shock becomes persistent.
That creates another problem for Britain because higher interest rates do not simply affect mortgages.
They increase the cost of borrowing for businesses, governments and local authorities. They can discourage investment and make major infrastructure projects more expensive.
So the ONS indicators are telling us something rather more subtle than the headline GDP number.
Britain is not falling off a cliff.
People are still spending. Companies are still hiring. Houses are still being bought and sold. New cars are being registered.
But beneath that relatively reassuring picture there are signs of pressure. Job advertising is weaker than a year ago, loan payment failures have increased and energy costs have risen sharply.
Now the oil market has added another layer of uncertainty.
For households in Caithness and the Highlands, this is particularly relevant. Energy and transport account for a larger part of everyday life in rural and remote areas, where journeys are longer and alternatives to the car are often limited. Heating oil also remains important to many homes.
The next ONS updates could therefore be much more revealing than the current figures.
The question is whether the economy can absorb another substantial increase in energy costs without consumer spending weakening, business investment slowing and inflation being pushed higher again.
For the moment, the evidence suggests an economy that is resilient but vulnerable.
That may be the most useful description of Britain as it enters what could be a very uncertain autumn.
Source
https://www.ons.gov.uk/economy/economicoutputandproductivity/output/articles/economicactivityandsocialchangerealtimeindicatorsukdashboard/2026-03-05