- UK CPI softens to 10.7% yoy in November, versus 10.9% expected.
- The UK monthly CPI came in at 0.4% in November, versus 0.6% expected.
- GBP/USD pared its gains towards 1.2350 after the big fall in the UK CPI.
The Consumer Price Index UK annualized CPI stood at 10.7% in Novembercompared to the 11.1% registered in October, and reached below estimates which pointed to 10.9%, as reported on Wednesday by the United Kingdom’s Office for National Statistics (ONS). The index fell back from its highest level since November 1981.
For his part, core inflation (which excludes food and energy price volatility) rose 6.3% YoY last month, up from 6.5% in October and below forecasts of 6.5%.
Monthly figures showed UK CPI consumer prices rose 0.4% in November, versus 0.6% expected and 2.0% previously.
The UK Retail Price Index for November was 0.6% MoM and 14.0% YoY, bettering estimates over the time horizon.
Additional comments (via ONS)
“The higher upward contributions to the annual inflation rate of the IPCH in November 2022 came from housing and domestic services (mainly from electricity, gas and other fuels), and food and non-alcoholic beverages.”
“The larger downward contribution to the change in annual inflation rates both the IPCH and the CPI between October and November 2022 came from transportation, particularly automotive fuelswith rising prices in restaurants, cafes and pubs making the largest contribution to the rise, partially offset.”
Why is UK inflation important to investors?
The Bank of England is tasked with keeping inflation, as measured by the main Consumer Price Index (CPI), at around 2%, which gives the monthly its importance. An increase in inflation implies an ever faster increase in interest rates or a reduction in the purchase of bonds by the BOE, which means squeezing the supply of pounds. Conversely, a drop in the pace of price increases indicates a looser monetary policy. A higher than expected result tends to be bullish for the GBP.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
