diff --git a/CHANGELOG.md b/CHANGELOG.md
index 74d4f93f6..ac2050512 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -71,6 +71,8 @@ Change log
 - Fixed a bug where missing secret files would generate an empty directory
   in their place
 
+- Fixed character encoding issues in the CLI's error handlers
+
 - Added validation for the `test` field in healthchecks
 
 - Added validation for the `subnet` field in IPAM configurations
diff --git a/compose/__init__.py b/compose/__init__.py
index 2b363f3be..231670a5c 100644
--- a/compose/__init__.py
+++ b/compose/__init__.py
@@ -1,4 +1,4 @@
 from __future__ import absolute_import
 from __future__ import unicode_literals
 
-__version__ = '1.18.0-rc1'
+__version__ = '1.18.0-rc2'
diff --git a/script/run/run.sh b/script/run/run.sh
index 441c0d806..4be14b722 100755
--- a/script/run/run.sh
+++ b/script/run/run.sh
@@ -15,7 +15,7 @@
 
 set -e
 
-VERSION="1.18.0-rc1"
+VERSION="1.18.0-rc2"
 IMAGE="docker/compose:$VERSION"