The Open Bell — Ep. 039 — 14 Aug 2026

Today on The Open Bell: Inflation came in cooler in July and the White House is taking a bow, but real wages are still negative, meaning prices are still rising faster than most people's pay, and that's been true every single month this year. Japan's wholesale prices have risen for five months straight and a rate hike in September is now almost a certainty, which sounds like someone else's problem until you realise the yen's weakness is quietly reshaping what everything from electronics to car parts costs you. Britain's economy grew in the second quarter, which is technically good news, but the IMF and OECD both cut the UK's outlook by more than any other wealthy country this week, and they named the reason: the UK is more exposed to the Middle East energy shock than almost anywhere else in the developed world. If today's episode helped you cut through the noise, a quick five-star rating genuinely helps other people find the show. Hosted by Alex Monroe. New episodes every weekday morning at theopenbell.co Not investment advice. For informational purposes only. --- Chapters: 00:00 Introduction 00:12 US CPI Cools to 3.4% in July, But Real Wages Still Negative 03:09 Japan Producer Prices Hold at 7.2%, BOJ September Hike Hits 05:40 UK Q2 GDP Grows 0.4% but Slows From Q1; June Surprise Lifts 07:27 Closing thoughts

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Good morning. It's Friday, 14 August 2026, and this is the Open Bell. I'm Alex Monroe, four months into a wage squeeze that keeps not ending. Today the data made it official again. Let's get into it. Yesterday morning, the Bureau of Labor Statistics, the U.S. government agency that measures what things actually cost, confirmed that consumer prices rose 3.4% over the past year, down from 3.5% in June. Core inflation, which strips out food and energy to show the underlying trend, came in at 2.5% annually. Both numbers landed exactly where forecasters expected. Markets celebrated. The SP 500, the index of 500 large American companies, the standard measure of how US stocks are doing, closed at a record, up about two-thirds of a percent. The Nasdaq, the tech heavy index, gained just over eight tenths. On the surface, a clean result, a calming print, a Fed that can stay put. Here's what the surface leaves out. Wages are growing at 3.2%. Prices are rising at 3.4%. That gap, small as it looks, means the average American worker is earning less in real terms than they were a year ago. Not stagnating, losing ground. This is the fourth consecutive month that inflation has outpaced wages, and each month it happens the hole gets slightly deeper. Groceries, rent, the commute, the things you can't cut cost more relative to your paycheck than they did 12 months ago. The White House is calling the inflation fight essentially one. The Bureau of Labor Statistics says prices are still winning. Energy is the detail that makes the headline number look better than it is. Energy prices fell 1.5% last month, mostly because the US-Iran ceasefire took some of the acute panic out of oil markets. But gasoline is still nearly 25% above where it was a year ago. Shelter costs, rent, and the equivalent cost of owning your home accounted for roughly two-thirds of the entire monthly price increase. Those don't move with ceasefires. The market has already made up its mind. Futures pricing, the bets traders place on where interest rates are headed, now shows a 94% probability of a rate cut at the Federal Reserve's September meeting. The Fed's rate setting committee, which last met in July and doesn't convene again until mid-September, is widely expected to hold. The inflation data removes the urgency of a hike. It does not remove the problem. The Cleveland Feds president has said publicly that the longer the central bank waits to finish the job, the more expensive finishing it becomes. She's a minority voice right now, but she has a point. 2.5% core inflation is not 2%, and that half point gap has been sticky for months. August CPI, due September 11th, is the next real test. If it comes in soft, the September cut is locked. If energy costs creep back and the Strait of Hormuz hasn't exactly been reopened for business, that 94% odds figure will move very fast in the other direction. Your pay rise is still losing to inflation. That's been true every month since April, and today's data didn't change it. Japan has been running a quiet experiment in how long a government can absorb an inflation problem before the central bank has to take over. The answer increasingly looks like about now. The Bank of Japan released its July Producer Price Index, the measure of what businesses pay for goods before those costs reach consumers. And it came in at 7.2% above a year ago. That's fractionally below June's revised 7.3%, which was the highest reading since early 2023. Five consecutive months of monthly increases. The direction is not ambiguous. The mechanism driving it is a combination of factors that have been building all year. AI-driven demand is pushing up the price of metals and industrial machinery. Middle East energy costs, the same Hormuz-driven oil premium we've been tracking all week, are feeding into import bills. And the yen, Japan's currency, is sitting at around 159 per dollar, which means everything Japan buys from abroad costs more in local currency terms. Import prices are up 29% year on year. That is a number that deserves a moment of silence. The Japanese government has been shielding ordinary consumers from the worst of this through energy subsidies, essentially paying the difference at the pump and the power bill. It's bought time, but it hasn't bought a solution. Over 500 Japanese companies went bankrupt in the first half of this year, unable to absorb costs they couldn't pass on to customers. The subsidy protected households. It didn't protect the businesses caught in between. Which is why markets are now pricing a 78% probability of a Bank of Japan rate hike in September, up from 63.5% just the day before. A rate hike in Japan is not a routine event. Japan has spent most of the last 30 years near zero interest rates running an experiment in cheap money that became the global baseline for how bond markets price long-term debt. When Japan moves, pension funds and bond portfolios worldwide reprice. The yen strengthens, capital flows shift, it reaches further than the headline suggests. A minority of analysts argue the BOJ will hold. Consumer inflation is still running below the 2% target, and a premature hike risks tipping exporters into contraction. That's a reasonable concern. But producer prices at 7.2% with five straight monthly rises don't feel like a problem that waits politely. Japan has been quietly subsidizing the cost of living while its corporate sector absorbs the damage. More than 500 firms couldn't hold on for six months. The BOJ is running out of reasons to stay patient. Britain's economy grew in the second quarter. Quarter on quarter, the Office for National Statistics clocked it at 0.4%. In line with forecasts, but slower than the 0.6% recorded in the first three months of the year. Year on year, real GDP is up 1.2%. There's genuine growth here. The debate is about what kind. The standout number is actually June in isolation. Monthly GDP rose 0.3% against forecasts of a slight decline. That's real momentum in the underlying economy. Services holding up, construction growing. It's the number that lifted sterling, which traded around $1.36 following the release. But the broader picture is harder to ignore. UK unemployment is at 4.7%, a four-year high. Inflation, measured by the CPIH index, which includes housing costs, is running at 2.8%. Wages excluding bonuses are growing at 5%. The Bank of England sits between those two figures, unable to cut rates to support a slowing economy without risking another inflation round. Unable to hike without further squeezing a labor market already at its weakest in years. That's not a soft landing, that's a policy bind with no clean exit. The IMF and OECD have both cut their UK growth forecast for this year by half a percentage point each. That is the largest downgrade of any major wealthy economy in either institution's latest round of revisions, and the explicit reason both cited is Britain's energy exposure. The UK imports more of its gas and oil relative to its economy than most of its European peers, which makes the Hormuz shock land harder here than almost anywhere else in the developed world. Britain grew last quarter, but the two institutions that exist to tell countries where they're headed just singled it out as uniquely vulnerable. And they're not often that specific. Step back from today's three stories, and what you have is a global economy where inflation is cooling just slowly enough to keep central banks hesitant, and where the energy shock that started this whole sequence hasn't actually resolved. It's just paused. The US consumer is still losing ground on wages, Japan is approaching a rate decision that will reverberate far beyond Tokyo. And Britain is growing, but being told by the people whose job it is to look ahead that the road gets harder from here. Next week, the number worth watching is U.S. August retail sales data, out Thursday. Consumer spending has been the floor under the US economy all year. If it shows cracks, the September rate cut case becomes overwhelming. If it holds, the Fed's careful silence continues. If you want today's figures in writing, the CPI breakdown, the BOJ odds, all of it, the newsletter has them free. Link in the show notes. That's the open bell. I'm Alex Monroe. Have a sharp morning.