What's going on?

British inflation dropped sharply in July, according to data out on Wednesday. But as always, the devil�s in the detail.

What does this mean?

July�s inflation rate clocked in at 6.8% versus the same time last year, a refreshing dip from June�s heated 7.9%. But hold off on the celebratory toasts for now. See, while the broader price landscape seems to be chilling out, there�s actually a bit of a ruckus beneath the calm. Core inflation � leaving out the ever-fickle food and energy prices � stubbornly stayed put at June�s 6.9%. Plus, the tab for services like hotels, dreamy holidays, and healthcare actually climbed by 7.4%, edging past June�s 7.2% rise. And the real kicker: if the perks of cheaper food and energy wane, and everything else keeps getting pricier, then inflation could regain its full momentum before long.

Why should I care?

For markets: Look after the pennies.
There�s been some good news for Brits this week too, though. Data out on Tuesday showed that wages climbed by a record-breaking 7.8% in the three months to the end of June � and you don�t need to be Alan Turing to calculate that that figure�s bigger than Wednesday�s headline inflation number. The upshot is that Brits have more actual cash in their pockets right now, for the first time in a long while.

The bigger picture: A second wave.
Maybe, then, Brits should embrace the �live in the moment� mindset � but let�s be real, that�s not quite the British way. And while some might be humming a more optimistic tune now, a chorus of stern-faced economists is already hitting a different note. Their forecast: that today�s cooling inflation might just rear its head next year, in a seriously hard-hitting sequel. That might sound a tad gloomy � but in Britain, it never rains but it pours.