UK: CPI likely to edge lower to 2.3% in November - ING

James Smith, developed markets economist at ING, points out that the UK CPI has edged lower from 2.4% to 2.3% in November, supported by the falling oil prices

Key Quotes

“Admittedly, if oil prices regain some poise as we move into the new year, as our commodities team expects, then headline CPI could inch temporarily nearer to the 2.5% level again during the first quarter before drifting back to target over the summer.”

“For the Bank of England though, the key question is whether the recent upward trend in wage growth translates into greater core price pressure next year.”

“With economic growth stalling, we suspect the Bank will be forced to sit on its hands through much of the first half of next year, and potentially even longer should the article 50 period need to be extended to allow more time to reach a Brexit solution.”