Suban Soraia Abdulla

British employers expect to raise wages by 3% in the next 12 months, but some recruiters expect artificial intelligence to shrink their workforce, according to a survey that showed firms were worried about the impact of government tax plans on hiring.

British finance minister Rachel Reeves should break election pledges not to raise taxes on working people so she can build "real fiscal headroom" in her budget this month, the Confederation of British Industry said on Thursday.

Pay settlements awarded by British employers held steady in the three months to September, according to a survey published a day before the Bank of England's interest rates decision.

British inflation unexpectedly held steady in September, raising the prospect of a Bank of England interest rate cut this year and offering some relief to finance minister Rachel Reeves ahead of her budget in November.

Yields on British government bonds fell sharply across maturities on Wednesday as investors bet that unexpectedly steady inflation data will prompt the Bank of England to cut interest rates at the end of this year.

Britain's labour market is showing more signs of cooling and businesses remain negative about their prospects in the coming months, according to surveys published on Monday.

British retailers reported a 12th straight month of falling sales in September and they expect another decline in October as weaker consumer demand and concerns about the government's next budget weigh, a survey showed on Thursday.

British firms have reported a loss of momentum and confidence ahead of possible new tax increases in finance minister Rachel Reeves' next budget in November, according to a survey that also showed another drop in hiring.

Pay settlements granted by British employers held at 3% in the three months to August but many firms are now offering smaller rises in response to their higher labour costs, according to figures from data firm Brightmine.

British inflation in August held at 3.8%, official data showed on Wednesday, the highest among major advanced economies and reinforcing expectations that the Bank of England will not cut interest rates until next year.

Average house prices in the United Kingdom in July were 2.8% higher than a year earlier, down from a 3.6% rise in the year to June, the Office for National Statistics said on Wednesday.

Britain's jobs market has lost a little more steam, official data showed on Tuesday, potentially easing worries at the Bank of England about persistent inflation pressures.

British house prices showed the most widespread falls in more than a year-and-a-half in August as new buyer demand weakened against a backdrop of a weak economy, high inflation and uncertain interest rate outlook, a survey showed on Thursday.

British shoppers spent more in August, helped by summer weather and stronger demand for food, furniture and back-to-school computers - though some of the increase reflected higher food prices too, the British Retail Consortium said on Tuesday.

Gigantic robot arms controlled by artificial intelligence glide around a vast factory in Oxfordshire, England, making building frames from timber, one of the world's oldest construction materials.

Officers made arrests after crowds, waving placards expressing support for the group, gathered in Parliament Square.

British inflation cooled slightly in May after jumping in April, with price growth in the services sector - key for the BoE - dropping more sharply.

Asking prices for homes put up for sale in Britain have fallen by the most in 14 years for the time of year, according to data published on Monday that adds to signs of softer pricing after the end of a tax break on house sales.

The Bank of England is set to keep rates on hold next week, sticking with its gradual approach to cuts after a reduction in May, but investors will look for hints on whether a slowing economy and weaker wage growth could speed up the pace of easing.

The British public's expectations for inflation over the medium term remained at their highest in several years although short-term expectations fell, according to a Bank of England survey on Friday ahead of its interest rates decision next week.