Why inflation is cooling in the UK

20 December 20235 months ago babelfish

In the United Kingdom, inflation slowed to 3.9% in November. Comment by Roberto Rossignoli, Portfolio Manager of Moneyfarm

For the first time since September 2021, headline inflation in the UK fell below the 4% threshold, rising from 4.6% in October to 3.9% in November on an annual basis. Core inflation also slowed, falling from 5.7% in October to 5.1% in November on an annual basis.

The data published this morning beat operators' expectations and confirm a downward trend, driven by food prices, whose inflation has fallen to single digits for the first time in 16 months . This is certainly positive news for British families, already severely penalized by the increase in energy prices and housing costs, for which, given the recent performance of energy raw materials, no improvements are expected, at least for the foreseeable future.

Core inflation remains far from the Bank of England's target and in the short term a decline to 2-3% seems unlikely, but markets are already betting on the fact that this downward trend will play a decisive role in the BoE 's policies, always very attentive to developments in core inflation. Although the latest data supports the idea of an end to monetary tightening, central banks may still consider it premature to declare victory against inflation. Meanwhile, families continue to have to deal with the high cost of living, which hits even harder during the holidays.

This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/perche-inflazione-si-raffredda-nel-regno-unito/ on Wed, 20 Dec 2023 15:37:36 +0000.