UK consumer inflation accelerated in line with expectations in November, although core inflation and services inflation surprised on the downside, figures on Wednesday showed.

According to the Office for National Statistics, the consumer prices index rose by 2.6% in the 12 months to November, picking up pace from a 2.3% rise in the 12 months to October. The figure was in line with FXStreet-cited market consensus.

On a monthly basis, CPI rose by 0.1% in November, slowing from 0.6% growth in October.

The largest upward contribution to the monthly change in CPI annual rates came from transport, the ONS said.

Core CPI, excluding energy, food, alcohol and tobacco, rose by 3.5% in the 12 months to November, accelerating from 3.3% in October. Core inflation had been expected to rise to 3.6%.

The closely watched CPI services annual rate was unchanged at 5.0%, below the 5.1% market expectation.

Separate figures from the ONS showed producer input prices fell by 1.9% in the year to November, compared to a revised fall of 2.4% in the year to October.

Producer output prices fell by 0.6% in the year to November, up from a revised fall of 0.9% in the year to October.

On a monthly basis, producer input prices were unchanged, while output prices rose by 0.3%.

Crude oil and refined petroleum products provided the largest upward contributions to change in the annual inflation rates for input and output prices, respectively, the ONS said.

Isaac Stell, Investment Manager at Wealth Club said the strength of the inflation figures, coupled with Tuesday’s higher than expected wage growth data ‘may well put to bed the possibility of a pre-Christmas rate cut from the BoE on Thursday’.

‘Although the public may feel Andrew Bailey and co are channelling their inner Scrooge, prudence on the BoE’s part seems sensible as no one wants to see the inflationary ghosts of Christmas past return.’

Copyright 2024 Alliance News Ltd. All Rights Reserved.