- +2.3% ahead
- Core CPI +3.5% vs +3.6% y/y expected
- +3.3% ahead
The figures are consistent with an annual price increase for November, after Ofgem brought back the energy price cap in October. Anyway, this just reaffirms the case that the BOE will remain on hold for this week. Looking at the details, services inflation remains unchanged at 5.0% on a core basis. And that will continue to be a key focus for the BOE next year.
In addition, there is still some uncertainty about how the latest budget will affect price pressures. But economists expect it to be slightly more inflationary. And along with an increase in employers' National Insurance ie social security, it could add materially to the inflation figures at the beginning of next year.
If so, that could be an obstacle for the BOE to make a strong case for cutting rates in the first half of the year. But as things stand, policymakers and economists all expect inflation to stabilize later in 2025. So, that argument still stands.
