United Kingdom inflation slowed down as expected in November due to consumer prices rising at a slower pace. According to the Office for National Statistics, CPI figures at a yearly rate gave a reading of 4.8 percent falling from the previous 5.0 percent.
On a monthly basis, CPI only rose 0.2 percent, also in line with expectations, rising marginally from the previous month’s 0.1 percent rise.
A slowing rate of increase in the prices of food, transport and clothing helped slow the increase in the rate of inflation. Also commodity prices are falling.
The lower inflation rate will most likely prompt the Bank of England to embark on a another round of quantitative easing. The data seem to be in line with the BOE forecast that inflation has peaked and will fall back sharply in the coming months. In October inflation eased for the first time since June.
The central bank forecasts that weak growth will push inflation well below its 2 percent target over the next 18 months, leading most economists to believe the BoE will inject an extra 75 billion pounds into the struggling economy by February when its current asset purchases are completed.
Sterling/ dollar was little changed after the data and traded somewhat flat for a few minutes before rising to 1.5602 by 09:50 GMT from 1.5577 at news time at 09:00GMT.