November 16, 2022 07:03 GMT
Headline Inflation Surge Unlikely to Push BOE to 75bp
UK DATA
MNI (London)
UK OCT CPI +2.0% M/M (FCST +1.8%); SEP +0.5% M/M
UK OCT CPI +11.1% Y/Y (FCST +10.7%); SEP +10.1% Y/Y
UK OCT CORE CPI +6.5% (FCST +6.4%); SEP +6.5% Y/Y
- UK inflation jumped by 1pp to +11.1% y/y in October, a significant 0.4pp beat on consensus forecasts. This was the highest since Oct 1981.
- According to an ONS spokesperson, without the energy package October headline inflation would have reached +13.8% y/y.
- This surge is above the BOE's anticipated peak of +10.9% y/y around October. Yet core inflation remained on par with September at +6.5% y/y. As such, this data is unlikely to push the BOE toward a more hefty December hike, with a 50bp hike remaining the expected outcome.
- Pricing for the December meeting has increased from around a 45% probability of a 75bp hike to a 55% probability. However, market pricing is known to overshoot.
Source: ONS
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