bearish
UK: Disinflation Driven in Oct-23
239 Views15 Nov 2023 19:49
SUMMARY
- UK inflation undershot expectations of 4.8% in October by plummeting to 4.6%. Most of that drop was an energy price base effect with downside news in car and hotel prices.
- Services inflation aligned with our relatively low forecast but disappointed the BoE. Other measures of underlying inflation, like the median, remained surprisingly strong.
- This outcome lessens the risk of another BoE rate hike. However, second-round effects still constrain this disinflation trend, with persistent excesses discouraging cuts.
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