MNI DATA IMPACT: CPI Anchored Below Target As BOE Meets>

By Laurie Laird and Les Commons

     LONDON (MNI) - Inflation remained subdued ahead of the Bank of 

England rate-setting this week, setting the stage for a potential rate 

reduction early next year. 

     The following are the key points from inflation data published 

Wednesday by the Office for National Statistics. 

     -- Inflation at both consumer and pipeline level remained subdued 

in November, raising speculation of a split in the Bank of England 

Monetary Policy Committee this week after two members voted for an 

immediate rate cut at the November meeting. 

     -- Consumer price inflation steadied at an annual rate of 1.5%, in 

line with expectations, sitting below the Bank's 2.0% target for the 

fourth straight month. Prices of tobacco and alcohol shaved 0.06 

percentage points from CPI as an increase in duties last year was not 

repeated in 2019.  

     -- Output PPI increased by an annual rate of 0.5%, while core 

output PPI rose by 1.1%, the slowest rate of increase on both measures 

since the summer of 2016.   

     -- The recent sterling rally could keep pipeline inflation in 

check, with the sterling effective exchange rate increasing by 1.7% 

between October and November, the fourth straight rise. On an annual 

basis, sterling appreciated by the same magnitude, the first rise since 

March. 

     -- House price inflation remained subdued, rising nationwide by an 

annual rate of 0.7% in October, the slowest pace since September 2012. 

London prices slumped by 1.6%, after the orginally-reported decline in 

September was revised to a 0.8% increase. 

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

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