london skyline

United Kingdom Inflation November 2023

United Kingdom: Inflation undershoots market expectations in November

Inflation came in at 3.9% in November, which was down from October’s 4.6%. November’s figure marked the lowest inflation rate since September 2021 and was well below forecasts of 4.4%, but was still almost double the Bank of England’s 2.0% target. The decline was driven by moderating price pressures for recreation and culture and for food and non-alcoholic beverages.

Annual average inflation fell to 7.9% in November (October: 8.4%). Meanwhile, core inflation fell to 5.1% in November, from the previous month’s 5.7%.

Finally, consumer prices dropped 0.24% in November over the previous month, swinging from October’s 0.01% rise. November’s result marked the weakest reading since July.

On the monetary policy implications, Nomura analysts said:

“We think this is promising news for the BoE, but the Bank cannot claim victory yet. Seasonally adjusting is always a challenge, but it looks like the momentum of services price inflation is still too high and the BoE will need to see further progress before it can start to contemplate rate cuts. Therefore, we remain of the view that Bank Rate will remain on hold at 5.25% until August 2024.”

Goldman Sachs analysts are more dovish:

“Recent data on key indicators of inflation persistence have surprised the BoE’s projections meaningfully to the downside, and we pull forward our first BoE cut to May (vs June previously).”

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest