Markets rattled and pound slides after US inflation higher than hoped in August – as it happened

Investors brace for further interest rate rises, as US CPI rose 8.3% in the year to August, dashing hopes of a larger fall, and food inflation is highest since 1979

In the City, shares in online grocer Ocado have tumbled almost 10% after it warned customers are cutting back.

My colleague Julia Kollewe explains:

Ocado has warned that annual sales will drop because customers are trading down to value products and buying less overall amid a worsening cost-of-living crisis.

The online grocer, which is owned partly by Marks & Spencer, said sales rose 2.7% from a year ago in the 13 weeks to 28 August, an improvement from the drop in the previous quarter.

At the same time, there remains extreme tightness with vacancies nonetheless remaining near record levels and economic inactivity reversing its recent falls to rise to its highest level since 2016. This was caused by people at opposite ends of the career ladder; largely driven by those aged 16 to 24 years and those aged 50 to 64 years. This participation gap in the labour market means hiring became even more challenging for employers.

While many people's thoughts may be elsewhere at the moment, the cost-of-living crisis continues to be reflected in a squeeze on real terms pay. Despite historically strong nominal regular pay growth, real wages were down -2.8% on the year - one of the largest falls on record.