Your pay rise lost to inflation. Again.
Four months running, your wages have lost to inflation. Today's CPI data makes it official again, and no one in Washington seems particularly bothered.
Listen to the same-day episode — Ep. 039
Your pay rise lost to inflation. Again.
Four months running, your wages have lost to inflation. Today's CPI data makes it official again, and no one in Washington seems particularly bothered.
Alex Monroe
August 14, 2026
⏱️ ~4 min read
📊 Today's Numbers
US CPI ▼ 3.4% YoY: still beating wage growth
Real Hourly Earnings ▼ -0.2% YoY: fourth straight month of losses
Japan PPI ▼ 7.2% YoY: BOJ September hike at 78% odds
GBP/USD ▲ 1.3575: UK GDP beat June, but IMF still downgraded it
Brent Crude ▼ $87.07/bbl: down 2% Thursday, easing PPI pressure
BOJ Hike Probability ▲ 78%: up from 63.5% the day before
🏦 MACROECONOMIC
Photo: Daniel Dan
Inflation Is Still Winning
July CPI came in at 3.4% annually, wages at 3.2%. The math isn't complicated, and it hasn't changed in four months. The White House is calling this progress. Technically, it is. Try telling that to your grocery bill.
CPI 3.4% YoY (down from 3.5%): energy normalisation after the US-Iran ceasefire drove the dip, but gasoline is still 24.6% above last year
Core CPI at 2.5% annually: in line with forecasts, removing urgency for a September hike. CME FedWatch now prices a 94% probability of a 25bp cut instead
Wages at 3.2% YoY: that's below the inflation rate, meaning average real hourly earnings fell 0.2% over the past year, and lower-income households absorb the most pain
💬 Shelter drove two-thirds of July's monthly price rise. Energy subsidies and ceasefire tailwinds are masking how sticky the underlying pressure actually is.
🏦 MACROECONOMIC
Photo: Huy Phan
Japan's wholesale prices held at 7.2% annually in July, a fifth straight monthly rise. The government is absorbing the pain through energy subsidies so consumers don't feel it directly. Over 500 firms went bust in the first half of 2026 because they couldn't pass costs on. The BOJ is running out of reasons to wait.
Japan PPI 7.2% YoY: yen-based import prices surged 29.1% YoY, driven by yen weakness, elevated oil, and AI-related metals demand
Yen at ¥159.32 per dollar: roughly half the late-July coordinated intervention gains have evaporated, and ¥160 is the level that triggered that intervention in the first place
BOJ September hike odds at 78%: up from 63.5% the day before. A confirmed hike would be the most consequential Asian central bank move of the year, rattling yen-carry trades worth hundreds of billions globally
💬 Every pension fund with exposure to Japanese bonds should have a September calendar alert right now.
🏦 MACROECONOMIC
Photo: Mike van Schoonderwalt
Britain Grew, But Nobody's Celebrating
UK Q2 GDP expanded 0.4% quarter-on-quarter. Fine. June came in at 0.3% monthly against a consensus of a slight decline, which is genuinely encouraging. But the IMF and OECD cut their UK 2026 growth forecasts more than any other major rich economy, unemployment hit a four-year high at 4.7%, and the Bank of England can't easily cut rates to help because inflation is still running at 2.8%.
Q2 GDP +0.4% QoQ: slowing from 0.6% in Q1, with industrial production down 0.2% month-on-month dragging on the headline
June monthly GDP +0.3% (vs consensus -0.1%): the upside surprise suggests the private sector has more resilience than the quarterly number implies
UK unemployment at 4.7%: a four-year high. Average earnings ex-bonus are holding at 5.0%, so the Bank of England is caught between supporting jobs and keeping inflation down
💬 The IMF singled out the UK as uniquely exposed to the Middle East energy shock. That's not a compliment.
📰 Also Today
US PPI flat in July (0.0% MoM after -0.1% in June): two consecutive near-zero wholesale readings suggest upstream Iran-conflict price pressures are easing, with Brent settling at $87.07 and WTI at $81.25, each off more than 2% Thursday. Goldman's desk sees this feeding into a softer August CPI print.
Asia-Pacific equities rose for a fourth straight week: the MSCI Asia-Pacific index gained 0.3% Friday and 2.6% on the week, with ANZ Bank up 4.4% on a profit beat. South Korea made its first gold reserve investment in 13 years during Q2, a quiet signal of how seriously emerging-market central banks are hedging dollar exposure.
Yen slides toward ¥160 intervention territory: after giving back half its late-July rally to sit at ¥159.32, currency traders are on watch ahead of the weekend. The BOJ's own July meeting summary flagged accelerating inflation risks, with one board member suggesting rate hikes could come faster than markets expect.
🎧 Listen to today's episode — The Open Bell with Alex Monroe
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Not investment advice. For informational purposes only.