MNI DATA ANALYSIS: UK Nov CPI Falls; Remains Above Target>

-UK Nov CPI +2.3% y/y vs +2.4% in Oct

-UK Nov Core CPI +1.8% y/y vs +1.9% in Oct

-UK Oct House Price Index +2.7% y/y, smallest rise since July 2013

     By Laurie Laird, Jamie Satchi and Jai Lakhani 

     London (MNI) - Consumer price inflation abated in November, 

dampened by volatile motor fuels and computer games prices, suggesting 

quiescence in domestically-generated price pressures. 

     The consumer price index increased by an annual rate of 2.3% last 

month, the slowest pace since March 2017, when it rose by the same 

magnitude. The outturn matched analysts' forecast of 2.3%, decelerating 

from a 2.4% rise in both September and October. 

     Core inflation abated more dramatically. Stripping out food and 

energy, annual core consumer inflation declined to 1.8%, matching the 

pace last recorded in March of 2017, down from the 1.9% pace recorded in 

each of the two previous months. 

     The result fell well short Bank of England staff forecast of a 2.5% 

annual rise in November as reported in the November Quarterly Inflation 

Report. 

     That takes inflation above the Bank's 2.0% target for the 

twenty-first straight month, and appears to provide the basis for the 

Bank's somewhat-controversial decision to raise interest rates after the 

Monetary Policy Committee meeting in August. 

     Subdued price rises for computer games, coupled with weak increases 

in tickets for live music events exerted the joint-biggest downward 

influence on consumer inflation. The recreation and culture sector 

shaved 0.09 percentage points from the change in the CPI. 

     Recreation and culture costs have been a main driver of consumer 

price fluctuations over the past year, but statisticians attributed that 

mostly to volatility in the costs of computer games. However, the 

weight of games, toys and hobbies in the CPI has actually declined 

modestly over recent years. 

     A sharp decline in motor fuel costs between October and November 

also weighed on consumer prices, with fuel and lubricant prices 

also shaving 0.09 percentage points from the change in CPI. 

     Petrol prices fell by 2.6 pence a litre to an average of 128.1 

pence a litre between October and November, after rising by 1.8 pence a 

litre to 119.1 pence in the same period a year earlier. 

     Consumer prices rose by 0.2% between October and November, after 

rising 0.1% between September and October. 

     CPIH, which regained its status as a national statistic last year, 

steadied at an annual rate of 2.2%, unchanged from October. 

     Intermediate price inflation also abated, courtesy of a 11.8% fall 

in crude oil prices between October and November. 

     Producer input prices declined by 2.3% between October and 

November, more shallow than analysts' forecast of a 2.8% monthly 

decline, but still the biggest fall since August of 2015. 

     Over the year to October, input PPI increased by 5.6%, the smallest 

gain since April, after an 10.3% increase in October.  

     Output PPI abated less dramatically, rising by 0.2% between October 

and November, outpacing the median forecast of a 0.1% monthly fall.  On 

an annual basis, output PPI declined to 3.1% from 3.3% in October. 

     Retail price inflation also decelerated, with RPI rising by an 

annual rate of 3.2% in November, down from a 3.3% pace in October.  

Stripping out mortgage interest payments, RPI-X increased by an annual 

rate of 3.1% last month, the smallest rise since January of 2017, after 

rising by 3.2% in October. 

     Meanwhile, UK house price inflation declined in October, with the 

official House Price Index rising by an annual rate of 2.7%, down from 

the revised 3.0% annual pace recorded in September. That's the slowest 

pace of increase since July of 2013. 

     London housing inflation continued to lag the rest of the country, 

with prices in the capital falling by an annual rate of 1.7%, extending 

a 1.8% decline September. London prices have now declined for the fourth 

straight month, the longest stretch since the four months to September 

2009. 

-London bureau: 44 (0) 203 865 3812; email: ukeditorial@marketnews.com

[TOPICS: M$B$$$,MABDS$]