The economic data from Britain has deteriorated in recent months. Manufacturing and industrial production are in contraction, the construction sector is in contraction as well while services joined the rest a couple of months later. The economy also contracted in Q2 as the GDP report showed.

But earnings, employment and inflation are holding on quite well, to be honest. That looks strange, but it takes a few months for the effects to show in employment and earnings after the main sectors fall in contraction. Although, it has been several months and the effects are not showing yet.

Instead, employment keeps growing at a decent speed as we saw yesterday, while earning are surging after the jump to 3.7% that yesterday’s report showed for June. Today it’s time to see the inflation report. Headline CPI (consumer price index) has been holding around 2% while core inflation is at around 1.8% which are really great numbers, not too high and not too low. Today inflation is expected to cool off to 1.9% but that’s still a decent level, while core CPI is expected to stay at 1.8%. So if inflation comes as expected, it will be another good report.