UK CPI inflation likely to rise by 1.1% y/y (cons: 1.1%) in November – RBC CM

Sue Trinh, Senior Currency Strategist at RBC Capital Markets, expects CPI inflation will rise to 1.1% y/y (cons: 1.1%) in November.

Key Quotes

“This would be 0.1ppts below the BoE staff forecast contained in the November Inflation Report, but that over-estimated inflation last month. The arithmetic hurdle for last month’s negative contribution from the clothing and footwear sector to reverse somewhat is low and petrol prices should be expected to make a positive contribution to annual inflation too. For RPI inflation we look for an increase to 2.2% y/y from 2.0% y/y last time which was actually very close to being 2.1% y/y. We still see UK inflation being clearly on the way up with the 2% target being reached in Q1 2017 as exchange rate pass-through continues.”