Britain’s private employers have all but stopped bidding for staff. Pay growth outside the public sector slowed to 2.9 per cent, the first time it has dropped below 3 per cent since the pandemic in 2020, while payrolls shrank by 4,000 and vacancies fell for another month.

The Office for National Statistics said the small contraction in June defied City projections of a rise of 20,000 jobs. The unemployment rate was unchanged at 4.9 per cent in the three months to May, having been expected to rise to 5 per cent.

For business owners, the significant number is not the headline unemployment rate but the 712,000 vacancies still open across the economy, down another 7,000 on the quarter. The ONS attributed that decline to smaller firms choosing not to hire in order to manage their wage bills and costs.

That is a familiar calculation in any SME finance meeting. When employment costs are fixed and demand is uncertain, the vacancy is the first thing to go. The result is a labour market that looks stable in aggregate while the hiring freeze among smaller employers deepens beneath the surface.

Total average earnings growth, including bonuses, slowed to 4.3 per cent from 4.4 per cent in the previous three-month period, and was unchanged at 3.9 per cent excluding bonuses. The gap between sectors is now stark: public sector pay ran at 5.5 per cent, flattered by the timing of NHS pay awards, against 2.9 per cent in the private sector.

Peter Dixon, senior economist at the National Institute for Economic and Social Research, said slowing pay growth would “complicate Andy Burnham’s pledge to give people breathing space to help with the cost of living, particularly with inflation poised to rise further in the second half of the year”.

There is a paradox in the numbers for anyone recruiting. Employment in the three months to May actually jumped by 64,000 to just below 34.5 million, and the economic inactivity rate edged down to 20.9 per cent from 21 per cent. More people are looking for work at precisely the moment employers are cutting hiring plans. Firms that can afford to recruit will find the candidate market friendlier than it has been in years.

Pay across the economy still rose faster than inflation for the 36th month in a row. Data due on Wednesday is expected to show inflation edged to 2.7 per cent in the year to June, which would be the lowest level since March 2025. The economy also returned to growth in May, with GDP up 0.1 per cent in the month.

A caveat is warranted. The ONS, whose labour market data has been plagued by inaccuracy problems for the past two years, said it carried out fewer interviews in the latest period “because of an operational issue, but our analysis suggests the impact on our headline estimates is minimal”. Payroll and employment estimates draw on different data sets, and the former is frequently revised.

Liz McKeown, ONS director of economic statistics, said: “The latest data show a relatively steady labour market picture overall, though some measures continue to suggest softening.” She added: “The number of employees on payroll was broadly flat in the latest month, while survey estimates suggest employment, unemployment and inactivity rates were little changed in the latest quarter.”

The read-across to borrowing costs matters more than the jobs numbers themselves for most owner-managers. Economists believe the health of the labour market will partly determine whether the Bank of England raises interest rates this year to counteract price pressures caused by the Middle East war energy shock.

The monetary policy committee meets on 30 July and is expected to leave borrowing costs unchanged at 3.75 per cent. UK government bond yields have risen sharply over the past month in response to an escalation in fighting between the US and Iran, which is why rate cuts remain off the table for now.

Cooling wage growth is the one variable pushing the other way. Firms holding off on recruitment to protect margins are, collectively, doing the Bank’s work for it.

Jamie Young

Jamie Young is Senior Reporter at Business Matters, covering SME finance, employment law and Westminster policy since 2016. He has reported on every Budget and Autumn Statement since 2018, helped make sense of the ‘covid era’ and the bounce-back loan scheme from launch through the fraud investigations, and broke the magazine’s coverage of the 2024 late-payment reforms. He joined Business Matters straight from completing his BA in Administration from Exeter University and is NCTJ-qualified. Reach him at jyoung@cbmeg.co.uk

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Cracker Barrel is selling restaurant properties and exiting its Maple Street Biscuit Company business as it works to cut debt and improve profits.

The Southern country-themed chain said Monday it sold the Maple Street brand and assets tied to 35 locations to Biscuit Belly LLC. Cracker Barrel will close the remaining 16 Maple Street restaurants.

In a separate move, Cracker Barrel also completed a sale-leaseback deal involving 26 company-owned locations, generating roughly $77 million in net proceeds.

The company plans to use the money to pay down debt while continuing to operate the restaurants by leasing the properties from the new owner.

CRACKER BARREL RESPONDS TO REPORTS ABOUT EMPLOYEE DINING REQUIREMENTS DURING WORK TRAVEL

Cracker Barrel is selling restaurant properties and exiting its Maple Street Biscuit Company business as it works to cut debt and improve profits. (Joe Raedle/Getty Images)

“These efforts reflect the discipline we bring to managing our business and balance sheet as we position Cracker Barrel for long-term success and shareholder value creation,” Julie Masino, president and CEO of Cracker Barrel, said in a statement. 

“Our sale-leaseback transaction will allow us to opportunistically reduce debt while monetizing a portion of our owned real estate at an attractive valuation.”

Masino added, “Divesting Maple Street sharpens our focus on the core Cracker Barrel brand and is expected to improve profitability.”

Biscuit Belly, which currently has 15 locations, said the deal will allow it to expand more quickly. It plans to convert the acquired Maple Street restaurants into Biscuit Belly locations over the next 18 to 24 months. 

CRACKER BARREL SALES, TRAFFIC CONTINUE TO SLUMP MONTHS AFTER FAILED REBRAND

Waffles and glazed biscuits served at Maple Street Biscuit Co.  (Jeffrey Greenberg/Universal Images Group via Getty Images)

The first conversions will begin in the greater Cincinnati area and Richmond, Virginia. The deal will more than triple Biscuit Belly’s footprint and is expected to help the chain grow to more than 60 locations by the end of 2028.

“When we looked at Maple Street’s geography, footprints, and established teams, a light bulb went off,” Chad Coulter, co-founder and CEO of Biscuit Belly, said in a statement.

Maple Street accounted for less than 2% of Cracker Barrel’s annual revenue. Cracker Barrel said the sale is expected to improve adjusted EBITDA beginning in fiscal 2027.

Cracker Barrel expects to record between $37 million and $39 million in non-cash charges tied to the Maple Street exit during its fiscal fourth quarter. It also anticipates between $6 million and $8 million in additional cash costs.

CRACKER BARREL’S TURNAROUND HITS EARLY SNAGS; CEO WARNS RECOVERY WILL ‘TAKE TIME’ AFTER REBRAND FIASCO

Cracker Barrel CEO Julie Felss Masino walks out of an office building in Brentwood, Tennessee, on Aug. 28, 2025.  (Zak Bennett for Fox News Digital)

The moves come as Cracker Barrel, which operates roughly 660 company-owned locations across 43 states, works to move past backlash over proposed changes to its logo and restaurant interiors last summer, including the removal of the “Old Timer” from its logo.

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The company reversed course less than a week later following customer complaints.

Cracker Barrel told FOX Business it had no additional comment beyond its press release.

The appointment has fuelled investor optimism over increased defence spending

Shares in defence firms including Rolls-Royce have surged to record highs as investors increased their wagers that incoming Chancellor John Healey would direct further funding towards London-listed arms manufacturers.

Defence supply heavyweights Babcock and BAE Systems were amongst the strongest performers yesterday after former defence secretary Healey was appointed to lead the Treasury under Andy Burnham.

Babcock shares jumped by more than 6.5 per cent within the first half hour of trading on Tuesday, while BAE Systems climbed by 2.8 per cent. Rolls-Royce stock, meanwhile, edged higher by 0.7 per cent to reach 1,369p.

Serco, which operates several facilities and delivers services to the Ministry of Defence, gained 1.7 per cent.

The surge in defence stocks reflects investor confidence in a swifter acceleration of defence expenditure under Chancellor Healey, with British firms also set to be given priority in procurement as part of a drive to “re-industrialise” the nation, as reported by City AM.

Last month, Healey resigned from Sir Keir Starmer’s government citing insufficient funding for defence spending. He accused the Treasury of being “unable” to provide enough cash for the military as it refused to set a date on when the government would raise defence spending to three per cent of GDP.

Under the existing Defence Investment Plan (Dip), expenditure is set to reach approximately 2.7 per cent of GDP by 2030. Healey has made the case for spending to climb to three per cent, and for the UK to establish a roadmap towards achieving 3.5 per cent by 2035 in line with a Nato agreement.

Healey and Burnham have also expressed a desire to favour British companies in government procurement, drawing on a pledge enshrined in Starmer’s Dip.

This could position domestically-listed firms for more prosperous times ahead, as contract pipelines appear poised to strengthen.

Following Healey’s appointment, one industry insider told City AM that senior executives were celebrating the prospect of an increase in defence spending.

They further noted that Burnham had made an “incredibly sensible” choice, and suggested Healey could look to explore procurement arrangements under Canada’s Defence, Security and Resilience Bank — a mechanism that had not been backed by Starmer and former Chancellor Rachel Reeves.

Rolls-Royce has established itself as a key supplier of engines for aircraft, submarines and other power systems, with its technology earmarked for the forthcoming Dreadnought submarine fleet as part of the government’s nuclear deterrence strategy. On Thursday it announced plans for a new £100 factory and defence research facility in Bristol.

Its Lift System engines are also deployed in F-35 jets, while the company additionally provides support for the Typhoon fleet. Rolls-Royce also holds contracts to develop autonomous drones, which are expected to be given priority by the government.

Chris Beauchamp, chief market analyst at the investment platform IG, cautioned that Healey’s appointment might not produce the benefits that defence companies anticipate.

“As Chancellor, he will have many competing demands, and won’t just be the MoD’s man in No 11.

“His experience made him an obvious candidate for the role, and he represents a middle way between [Ed] Miliband and [Shabana] Mahmood, but it will not be easy to find lots more cash for defence, especially when the new Prime Minister is so busy making broad spending commitments in other areas.”

TAIPEI — Shares of Asustek Computer climbed further Wednesday, extending a sharp rally that has pushed the Taiwanese electronics maker’s stock up dramatically this year on the strength of surging demand for artificial intelligence servers and AI-enabled personal computers.

Asustek shares, traded on the Taiwan Stock Exchange under ticker 2357, stood at 757.00 Taiwan dollars as of 1:30 p.m. local time Wednesday, up 21.00 Taiwan dollars, or 2.85%, on the day. The gain builds on a stretch of strong performance for the stock over the past several months, part of a broader rally across Taiwan’s technology sector tied to booming global investment in AI infrastructure.

A year of record growth

Asustek’s rally has been underpinned by genuinely strong underlying business results. The company reported record first-quarter 2026 brand revenue of roughly 194.05 billion Taiwan dollars, or about $6.19 billion, marking a 44% increase year-over-year, driven by surging AI server demand alongside stable notebook computer shipments. That performance has helped fuel a stock price that has climbed sharply over the trailing 12 months, with shares up around 69% over just the past month alone during one recent stretch of gains, according to market data.

The company’s 52-week trading range spans from 490.00 to 964.00 Taiwan dollars, illustrating just how volatile, and ultimately how strong, the stock’s performance has been over the past year as investor enthusiasm around AI infrastructure spending has intensified.

Betting big on AI servers

Asustek has positioned itself aggressively in the AI server market over the past year, forming partnerships with major chipmakers including Nvidia, Intel and AMD to build out a broad portfolio of AI infrastructure products. At the Computex trade show in Taipei this June, the company unveiled a range of new AI server systems built around Nvidia’s latest chip platforms, including servers powered by Nvidia’s HGX B300 platform designed for large-scale AI model training and inference, aimed at enterprises, cloud service providers, research institutions and universities running demanding computational workloads.

The company has also showcased liquid-cooled AI infrastructure built around Nvidia’s newer Rubin chip platform at Nvidia’s GTC conference this year, part of a broader strategy the company has described as delivering end-to-end AI factory capabilities spanning everything from data center infrastructure design to large-scale AI deployment.

Asustek co-CEO S.Y. Hsu has been explicit about the scale of the company’s ambitions in this space, saying earlier this year that the company is targeting a 100% growth rate for its AI server business in 2026. Hsu said it was “highly possible” that enterprise and commercial products, which include AI servers, would become the company’s highest revenue-generating segment, and said Asustek was aiming to begin mass production of Nvidia’s Vera Rubin servers within the year.

Expanding beyond servers into AI PCs and robotics

Asustek’s AI strategy has extended well beyond data center hardware. At Computex 2026, the company also unveiled its latest generation of AI-enabled consumer laptops and desktop computers, including new ProArt creator laptops built around Nvidia’s RTX Spark platform and featuring AI-powered software tools designed to optimize system performance for demanding creative workflows.

Company chairman Jonney Shih has described Asustek’s broader ambitions as extending beyond both servers and PCs into what he has called agentic AI, edge AI and physical AI, with the company treating humanoid robotics as a significant future market opportunity. Shih has said the company’s AI server shipments have continued to surge even amid broader industry memory chip shortages that have complicated component sourcing across the electronics sector.

A dividend-paying, analyst-favored stock

Beyond its AI-driven growth story, Asustek has maintained a reputation among investors as a steady dividend payer, with a trailing dividend yield of roughly 6% based on the past 12 months of payouts. The stock currently carries a consensus analyst recommendation of Buy, with average 12-month price targets ranging as high as 1,200 Taiwan dollars, well above current trading levels, reflecting continued analyst optimism about the company’s AI-driven growth trajectory.

Founded in 1989 and headquartered in Taipei, Asustek researches, designs, manufactures and sells a broad range of computing and electronics products globally, including laptops, desktop computers, motherboards, graphics cards, networking equipment, servers and mobile accessories, distributed under the ASUS brand across markets including the United States, Canada, Asia, Europe and Africa.

Part of a broader Taiwan tech rally

Wednesday’s gains for Asustek come amid a broader rally across Taiwan’s technology sector, which has benefited significantly from global enthusiasm around AI infrastructure spending this year. Semiconductor and hardware companies across the island have seen substantial stock price appreciation as major technology companies worldwide continue to pour capital into AI data center buildouts, a trend that has lifted shares of chipmakers, server manufacturers and component suppliers across the region.

Asustek is scheduled to release its next quarterly earnings report on Aug. 12, which will offer investors a more detailed look at whether the company’s AI server and AI PC businesses have continued to deliver the kind of growth reflected in its record first-quarter results. Given how closely the stock’s recent performance has tracked broader sentiment around AI infrastructure spending, any signals from that report about order backlogs, margins or production capacity, particularly around the company’s push into Nvidia’s newest Rubin chip platform, are likely to remain a key focus for investors watching whether Asustek’s rally can continue in the months ahead.