The headline release from the UK yesterday was the inflation rate figure for November. As expected, it dropped to 2.3% from 2.4% the previous month, to hit its lowest level in 20 months. The Office for National Statistics said that lower petrol prices pulled inflation down, with the cost of games, toys and cultural services playing a part too. The drop means that wages are outpacing the cost of living, which is welcome news in the run-up to Christmas. With average earnings rising at a rate of 3.3%, real wages are growing by around 1%.
We also saw UK house price growth hit a five-year low in October. The price of the average property increased by 2.7% in the year to October, from 3% in September. Prices in London were the main reason, as they dropped by 1.7% in the last year to drag the national average down. However, it is worth noting that properties in London are still 35% more than they were five years ago.
The Confederation for British Industry’s industrial trends orders for December fell to 8 in December from a four-month high of 10 the previous month. However, this was better than the 6 the markets had been expecting and shows factory orders have increased for two straight months.
Today we will see the Bank of England’s interest rate decision, which is certain to be a vote to keep rates on hold this time around. It will be interesting to see what the meeting minutes show though. We will also see CBI distributive trades for December and the retail sales for November.
