We can help you develop your capabilities until you achieve your dream

Crypto News

U.K. Inflation Unexpectedly Rises to 2.3% in October

The U.K. Consumer Price Index (CPI) increased to 2.3% year-over-year in October, surpassing expectations of 2.2% and rising from 1.7% in September. This brings inflation back above the Bank of England’s 2% target.

Key points from the Office for National Statistics (ONS) report:

  • Core inflation, excluding energy, food, alcohol, and tobacco, rose to 3.3% from 3.2%
  • Services inflation increased to 5.0%, a concern for the Bank of England
  • Housing and household services saw significant increases, with electricity prices rising 7.7% and gas prices up 11.7%
  • The monthly CPI rose by 0.6%, up from being unchanged in September
  • Headline CPIH (including owner occupiers’ housing costs) rose to 3.2% from 2.6%

Link to ONS October U.K. CPI Report

Higher energy prices were the main contributors to the inflation rise, following Ofgem’s 10% price cap increase on October 1st. Housing and household services (including energy) contributed 0.51 percentage points to the monthly change in CPIH.

Market Reactions

British pound vs. Major Currencies: 5-min

Overlay of GBP vs. Major Currencies Chart by TradingView

Overlay of GBP vs. Major Currencies Chart by TradingView

The British pound was already seeing green before shooting up on the higher-than-expected inflation print.  This reaction shouldn’t be a surprise as the rise in inflation rates–particularly in the services sector–suggests that inflationary pressures are not easing as quickly as the Bank of England might have hoped.

This outcome leads to the idea that the Bank of England has limited room  to cut rates, potentially keeping the interest rate at or above the neutral rate, which could be supportive for the GBP as the market has signaled.


However, some of these gains were trimmed during the London session as traders digested the full implications of the data, and possibly profit taking / repositioning ahead of public comments from several Fed members through the rest of the week and Friday’s round of flash global PMI updates.

The question now is if the markets still expect BOE rates to remain on hold at the December meeting, which is more likely after today’s data–and whether current expectations for 25 bps cuts in February and May 2025 will be pushed back as well.


Source link

اترك تعليقاً

لن يتم نشر عنوان بريدك الإلكتروني. الحقول الإلزامية مشار إليها بـ *

زر الذهاب إلى الأعلى

Please turn off the ad blocker, as ads are the only source of our continuity

برجاء دعمنا عن طريق تعطيل إضافة Adblock