Investing.com - The annual rate of change in Britain's consumer price index dropped to its lowest level in 21-months in November, underlining the case for the Bank of England to hold off on further policy tightening.
Year-on-year, UK CPI rose 2.3% last month, its lowest level since March 2017, after a 2.4% rise in October.
Month-over-month, consumer price inflation rose by 0.2% in November. That was in line with forecasts and slightly higher than the 0.1% seen a month earlier.
Core CPI, which excludes food, energy, alcohol, and tobacco costs, rose by 1.8% in November, compared to 1.9% a month earlier. That reading was also in line with expectations
Traders widely expect UK’s central bank to make no changes to interest rates when it announces its decision on Thursday, amid an ongoing political deadlock over Britain’s efforts to exit the European Union.
The BoE has raised interest rates twice since November 2017 and expects to continue pushing them up gradually. But policymakers remain cautious as they watch to see how smoothly Brexit goes, despite a recent acceleration in wage inflation.
The most recent data showed that average weekly earnings, including bonuses, rose by 3.3% on the year in October, the biggest rise since July 2008.
“This is a key reason why policymakers appear keen to tighten policy further, although given all the noise surrounding Brexit, it’s looking increasingly likely that the central bank will remain on hold through the first half of 2019 (and possibly beyond),” ING economists said in a note.