The economic data from Britain has turned pretty dovish in the recent months. The data was holding up well in the first couple of months, but that was due to firms accumulating stocks and inventories ahead of a disruptive Brexit. That wouldn’t last long though, which is why the data has turned pretty negative in the last coupe of months.

Yesterday we saw the manufacturing and industrial production turn negative and take a deep dive, while construction output declined for the second month. The GDP also contracted for the second consecutive month as the GDP report showed, losing 0.4% in April. So, the market was pricing in a weak earnings report today.

Average earnings 3m/y did cool off in April to 3.1%, but that’s much better than expectations of 2.9% and the markets were expecting an even weaker figure after the terrible numbers we saw yesterday. Average earnings excluding bonuses came even better as it increased from 3.3% to 3.4%, against 3.2% expected. So, overall, this was a decent report, showing once again that earnings and wages are still growing at a good speed in the UK despite Brexit.