UK Inflation Rises to 3.1% in November

The U.K. inflation rate has increased to 3.1 percent, its highest level since March 2012, according to data from the Office of National Statistics (ONS) released Tuesday.

This puts consumer prices for November up 0.1 percentage points from October’s consumer price index (CPI) rate of 3 percent, which was itself a five-and-a-half year high.

The new figures are in line with the Bank of England’s (BoE) expectations that inflation would peak at just over 3.0 percent before the end of this year.

“It would be helpful for economic growth going forward if inflation is close to peaking,” Lee Hardman, currency analyst at MUFG, said in an email note.

“The largest upward contribution to the rate change came from airfares, which fell between October and November, but by less than a year ago,” the ONS wrote. The spike in inflation also responded in part to a fall in the pound over several weeks of tumultuous Brexit talks.

“CPI inflation edged above 3 percent for the first time in nearly six years with the price of computer games rising and air fares falling more slowly than this time last year. These upward pressures were partially offset by falling costs of computer equipment,” Mike Prestwood, head of inflation for ONS, said.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency
trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza