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2025-12-17 15:09:25
[UK November Inflation Unexpectedly Slows, Strengthening Expectations of a Bank of England Rate Cut] ⑴ The UK Consumer Price Index (CPI) rose 3.2% year-on-year in November, lower than the expected 3.5% and the previous reading of 3.6%. The core CPI rose 3.2% year-on-year, lower than the expected 3.4% and the previous reading of 3.4%, the lowest since January. ⑵ This data unexpectedly fell short of expectations, especially core inflation. This will solidify market expectations for a Bank of England rate cut this week and may pressure the central bank to consider further rate cuts in the future, provided it can begin to signal that inflation will continue to decline next year. ⑶ After the data release, the pound fell 0.6% against the dollar, from 1.3377 before the data release to 1.3345. ⑷ The breakdown data showed that the sharp decline in inflation was mainly due to food price inflation slowing from 4.9% in October to 4.2% in November. ⑸ In addition, goods inflation also slowed from 2.6% to 2.1%, as "Black Friday" discounts led to a 0.3% month-on-month decline in clothing and footwear prices and a 0.6% year-on-year decline. In contrast, clothing and footwear prices rose 0.6% month-on-month in November 2024, suggesting that the Black Friday discounts may have had a greater impact on lowering prices. (6) Service sector inflation, however, decreased slightly from 4.6% in October to 4.5% in November.
