UK November CPI +3.9% vs +4.4% y/y expected

<ul><li>Prior +4.6%</li><li>Core CPI +5.1% vs +5.6% y/y expected</li><li>Prior +5.7%</li></ul><p>Despite pushback by the BOE, a clear miss on inflation data such as this one will continue to prove to markets that they are right to price in quicker rate cuts. The pound has fallen as a result, with traders set to look to pin down May as a potential first rate cut for the BOE next. The odds of that before the report were at ~65%, so let's see how that changes at the open later.</p><p>Going back to the report, the details show that food price inflation has also eased further with the annual reading now dropping below double-digits to 9.2% in November. With core prices also sliding more than expected, this may pressure the BOE into changing their rhetoric sooner rather than later given market pressure. But at 5%, I still think that is too high a benchmark for now.</p>

This article was written by Justin Low at www.forexlive.com.