- Minouche Shafik, BoE Deputy Governor for Banking and Markets
British inflation rebounded slightly in November after being in negative territory for two months in a row. Nevertheless, growth in consumer prices remained near zero for 10 consecutive months, giving the Bank of England ample scope to decide when to hike interest rates even if the Fed takes action this week. According to the Office for National Statistics, annual consumer price inflation climbed 0.1% last month from October's reading of –0.1%, aided by smaller-than-expected falls in the prices of alcoholic drinks, tobacco and transport. The UK inflation has stuck in a narrow range between –0.1% and +0.1% since February, mainly due to a decline in oil prices. However, robust growth in Britain's economy means the central bank have been less concerned about persistent deflation than their European colleagues. Core inflation, which strips out volatile components such as energy, food, alcohol and tobacco, climbed 1.2% from 1.1% in October. Last month the BoE predicted inflation to stay below 1% for the first half of next year.
A separate report showed house price inflation in October increased 7.0%, compared with 6.1% in September and marking the fastest price growth since March. Prices in London alone surged by 7.7%.
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