What's going on?

Data out on Tuesday showed that the UK’s unemployment rate fell to its lowest since 1974 in August.

What does this mean?

The UK�s official unemployment figure fell to 3.5% across June, July, and August � a drop economists weren’t expecting and an inflation-fueling injection the economy didn’t need. A key factor in that rate coming down was rising inactivity (the number of people out of work and not looking for jobs), propelled by record long-term sickness in older workers. That�s not good, obviously. And neither is the fact that the shrinking employment pool is likely to drive wages skyward, as employers try to snare workers with increasingly tantalizing salaries. Sure, in the short term that might fund a few payday blowouts � but in the long run, it means more inflation and an ever-weakening economy.

Why should I care?

The bigger picture: The BoE with the thorn in its side.
Inflation’s only one of the problems the UK�s contending with at the moment: the Bank of England (BoE) took a fireman�s hose to the burning bond market at the end of last month, bringing in emergency buying measures designed to shore up the value of Britain�s plummeting bonds. The central bank was then forced to expand those rescue efforts on Tuesday, hoping to stop �fire sales� causing yet another meltdown. But with those measures due to wrap up at the end of this week, markets could open with a nosedive come Monday.

For you personally: Homeowners, eat your hearts out.
Higher rates are hitting British homeowners, with the average five-year fixed-rate mortgage now above 6% � the highest since 2009. That means paying a mortgage is more expensive than paying rent, a strange turn of events in a country where mortgage payments have historically undercut rental payments by 20% to 30%. But for Brits looking to get a foot on the property ladder, there is a silver lining here: analysts reckon house prices could fall by 10 to 15% next year.