GDP-
Despite not being quite as significant a drop as initially expected, today's UK CPI figure is still good news. Much of the reason for the drop is just the base effect, lower year over year comparisons in 2024 for food inflation in the months preceding October mean that this figure was always somewhat bound to drop.
Moreover, the fact that it was mostly down to higher transport prices, owing to higher fuel costs this year that have risen an aggressive 2.4% to 3.8% from August to September.
It does seem likely to be a cold November, possibly energy providers are already pricing as such, explaining the rise. Core CPI, the measure that excludes often volatile and unrepresentative food and energy prices notched a smaller drop, from 3.6% to 3.5%.
This is generally good news and the Pound is softening as traders inch up bets of a BoE cut come December, but there are still strong signs that inflation remains a tough nut to crack. We have however, passed the two requirements that Andrew Bailey said he needed to support a rate cut, higher unemployment and a softer inflation figure.
This likely makes the long run GBP outlook even weaker.
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