The United Kingdom’s Consumer Price Index (CPI) saw an annual increase of 3.9% in November, a decline from October’s 4.6% rise. This figure was lower than the market’s anticipated acceleration of 4.4%. Meanwhile, the Consumer Prices Index including owner occupiers’ housing costs (CPIH) rose by 4.2% year over year to November 2023, down from 4.7% in October 2023.
On a monthly basis, both CPI and CPIH fell, with the former dropping by 0.2% and the latter decreasing by 0.1%. These figures contrast with November 2022’s rise of 0.4% for both indices.
Key Contributors to Inflation Trends
The most significant downward contributions to the monthly change in both CPIH and CPI annual rates were from transport, recreation and culture, and food and non-alcoholic beverages.
Core Inflation Figures
Excluding volatile items such as energy, food, alcohol, and tobacco, core CPIH rose by 5.2% in the 12 months to November 2023, down from 5.6% in October. Similarly, core CPI increased by 5.1% year over year in November, a decrease from October’s 5.7%. Both figures were lower than the expected 5.6%.
GBP/USD Reaction to Inflation Data
The release of the UK’s inflation data triggered a selling wave for the GBP/USD, causing it to drop below 1.2700. The pair has fallen 0.60% on the day, trading above 1.2650.
Long-Term Inflation Trends
The CPIH rose by 4.2% in the 12 months to November 2023, down from October’s 4.7% and a peak of 9.6% in October 2022. This suggests that the October 2022 rate was the highest in over 40 years. In contrast, November 2023’s annual rate was the lowest since October 2021.
| Index | Nov 2023 YoY | Oct 2023 YoY | Nov 2023 MoM | Nov 2022 MoM |
|---|---|---|---|---|
| CPI | 3.9% | 4.6% | -0.2% | 0.4% |
| CPIH | 4.2% | 4.7% | -0.1% | 0.4% |
| Core CPI | 5.1% | 5.7% | N/A | N/A |
| Core CPIH | 5.2% | 5.6% | N/A | N/A |
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