UK consumer prices slowed much more than expected in November

Consumer price inflation in the UK slowed by much more than expected in November.

The consumer price index (CPI) advanced at a year-on-year pace of 1% and fell by 0.3% versus the prior month, according to the Office for National Statistics (ONS).

That was much worse than the consensus estimate for a reading of 0.0% (1.2% year-on-year).

As one might have expected, a drop in the cost of transport, notably for motor fuels and air transport, was one of the chief factors behind the decline. Transport prices decreased by 1.2% month-on-month.

Falling prices for second-hand cars and recreational and cultural goods were another reason for the drop in the month-on-month rate. The latter retreated by 0.3%.

Excluding food, energy, alcohol and tobacco the CPI registered a decrease of 0.1% on the month while rising by 1.2% versus a year ago. However, that was still a marked reduction from the prior month’s reading of 1.5%.

As of 09:53 cable was bouncing back by 0.43% to 1.5701 after initially weakening in the aftermath of the report, hitting an intraday low of 1.5614.