UK Inflation Report to Come Out After Great Earnings We Saw Yesterday

Posted Wednesday, July 17, 2019 by
Skerdian Meta • 1 min read

The UK economy has been on a slippery slope since the Brexit vote about three years ago. We did see a rebound in Q1, but that was due to British firms sticking up ahead of a no-deal Brexit, which would be disruptive to trade. That period is over now, after a number of negative reports, which showed that different sectors of the UK economy are now in contraction.

As a result, the GBP has turned quite bearish and despite a really great earnings report yesterday, GBP/USD continued to slide lower. Earnings, employment and inflation are the only three aspects of the British economy which have been holding up surprisingly well, despite the dive in services, manufacturing, industrial production, construction, etc.

Inflation is understandable as the GBP keeps sliding lower, but earnings are a bit of a mystery. After yesterday’s earnings and employment reports, today we have the inflation report on the schedule.  Headline CPI (consumer price index) inflation is expected to remain unchanged at 2.0% which is a really good place, not to0 high and not too low. Core CPI is expected to tick higher to 1.8% again after ticking lower to 1.7% last month. So, no major change expected in inflation but let’s see the reaction in the GBP pairs.

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