US business activity picked up in July, but companies asked higher prices for goods and services, supporting economists' views that inflation will accelerate in the second half of the year mainly because of tariffs on imports.

The number of Americans filing new applications for jobless benefits fell to a three-month low last week, pointing to stable labour market conditions, though sluggish hiring is making it harder for many laid-off workers to land new opportunities.

British consumers remained in a cautious mood this month ahead of possible tax increases later this year and added to their savings, according to a survey published on Friday.

Oil prices rose on Friday, buoyed by optimism over a potential trade deal between the US and the European Union (EU), and reports of Russian plans to restrict gasoline exports to most countries.

US President Donald Trump locked horns with Federal Reserve chair Jerome Powell during a rare presidential visit to the US central bank on Thursday, criticising the cost of renovating two historical buildings at its headquarters and pressing the case for lower interest rates.