UK inflation eases more than expected in November
By Michele Maatouk
Date: Wednesday 20 Dec 2023
(Sharecast News) - UK inflation eased more than expected in November, according to figures released on Wednesday by the Office for National Statistics, boosting rate cut hopes for next year.
Consumer price inflation slowed to 3.9% from 4.6% in October. This marked the lowest reading since September 2021 and was below analysts' expectations of 4.4%.
The ONS said the largest downward contributions came from transport, recreation and culture, and food and non-alcoholic beverages.
Core inflation - which strips out volatile food and energy prices - fell to 5.1% in November from 5.7% the month before. Economists were expecting it to ease to 5.6%.
ONS chief economist Grant Fitzner said: "Inflation eased again to its lowest annual rate for over two years, but prices remain substantially above what they were before the invasion of Ukraine.
"The biggest driver for this month's fall was a decrease in fuel prices after an increase at the same time last year.
"Food prices also pulled down inflation, as they rose much more slowly than this time last year.
"There was also a price drop for a range of household goods and the cost of second-hand cars."
ING economist James Smith said markets are now pricing a whopping 140 basis points of rate cuts next year.
"That's maybe pushing it, but investors are right to be thinking about several cuts next year, despite the Bank of England's recent pushback," he said.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: "November's surprisingly sharp fall in CPI inflation reinforces the likelihood that the MPC will begin to reduce Bank Rate in the first half of 2024, far earlier than it has been prepared to signal so far."
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN