U.K. consumer price inflation likely to have accelerated strongly in November

U.K. inflation is expected to have resumed its upward trend in November. The consumer price inflation is expected to have accelerated strongly in the month after falling back to 0.9 percent year-on-year in the prior month. The expected rise is due to increases in both core and non-core components.

Energy is expected to have been a key indicator with prices of petrol increasing by more than 3 percent when compared with a decline of 1 percent last year. Furthermore, there might have been a slight slowdown in food price deflation. The BRC shop price index provides certain suggestion of that, said Societe Generale in a research report.

Last month, core inflation had declined to 1.2 percent from 1.5 percent, mainly because of the heavy discounting of footwear and clothing after a very poor September. That had the desired impact on sales in October so the discounting is likely to have ended. Moreover, a certain rise in services inflation is also likely. The result should have been a rise in core inflation to 1.4 percent.

“Overall we forecast an increase in CPI inflation from 0.9 percent to 1.2 percent yoy”, added Societe Generale.

At 09:00 GMT the FxWirePro's Hourly Strength Index of British Pound was neutral at -44.7244, while the FxWirePro's Hourly Strength Index of US Dollar was bullish at 79.3206. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex