{"id":11053,"date":"2024-12-18T09:04:03","date_gmt":"2024-12-18T09:04:03","guid":{"rendered":"https:\/\/hamiltoncourtfx.com\/?p=11053"},"modified":"2024-12-18T09:04:06","modified_gmt":"2024-12-18T09:04:06","slug":"uk-inflation-rises-ahead-of-tomorrows-boe","status":"publish","type":"post","link":"https:\/\/hamiltoncourtfx.com\/es\/uk-inflation-rises-ahead-of-tomorrows-boe\/","title":{"rendered":"UK Inflation Rises Ahead of Tomorrow\u2019s BoE"},"content":{"rendered":"
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Word of the Week Wednesday<\/strong><\/p>\n

\u2018Brain rot\u2019 was Oxford\u2019s Word of the Year for 2024. According to Oxford the term describes \u201cthe supposed deterioration of a person\u2019s mental or intellectual state, especially viewed as the result of overconsumption of material (now particularly online content) considered to be trivial or unchallenging.\u201d<\/p>\n<\/div>\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n\n\n

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UK Inflation Rises Ahead of Tomorrow\u2019s BoE<\/h2>\n <\/div>\n
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This morning, data from the ONS indicated that headline inflation rose to 2.6% in November, marking the index\u2019s highest level in eight months. \u00a0 This 30bps increase in the annualised consumer price index from the previous month\u2019s print came in line with expectations and marks the second consecutive month where the rate of inflation rose. \u00a0 The print also marks a meaningful departure from the recent lows recorded in September where headline inflation dropped to 1.7% – the only print to have come in lower than the BOE target rate since April 2021. \u00a0 The rise in headline CPI came alongside service price inflation which came in at 5% while core inflation (annualised) rose 3.5% on the year, marginally below forecasts of 3.6%. \u00a0 Meanwhile, the Consumer Prices Index including owner occupiers’ housing costs (CPIH) rose by 3.5% – \u00a0up from 3.2% figure recorded in October. Given that this includes mortgages and council tax – which are excluded from the CPI \u2013 this is often considered a more comprehensive gauge of inflation, and its rise is indicative of the cost pressures still facing households. \u00a0 Data from the ONS also indicated that airfares experienced their greatest drop since records began well over two decades ago. Here, the ONS cited falls in airfares of European routes as one of the key drivers of the 19.3% drop. \u00a0 Commenting on this morning\u2019s release, the Chancellor said that “Today’s figures are a reminder that for too long the economy has not worked for working people.” \u00a0 Attention now turns to tomorrow\u2019s MPC meeting, where markets are expecting the Bank of England to hold rates. Looking further ahead, markets are pricing in around a 70% chance of a 25bps cut by February and around two 25bps cuts by September.<\/p>\n <\/div>\n <\/div>\n <\/div>\n<\/div>\n\n

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All Eyes FOMC<\/h2>\n <\/div>\n
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At 1900 this evening today, markets will turn their attention to FOMC where the Federal Reserve are widely expected to conduct a 25bps rate cut to bring their benchmark interest rate to a target range of 4.25%-4.5%. \u00a0 This would mark the third consecutive rate cut during the current cycle and follows their decision in November to cut rates by 0.25 percentage points. \u00a0 Since their last meeting, headline inflation rose further to 2.7% marking a 10bps increase from the previous month\u2019s figures and a 30bps increase from the recent lows recorded in September. Annualised PCE \u2013 the Fed\u2019s preferred method of gauging inflation \u2013 also rose 20bps between September and October, indicative of how the Fed are not wholly out of the woods in their fight against inflation. \u00a0 During the last meeting the minutes expressed that further progress had been made on bringing down inflation, though policy makers also indicated that they would remain cautious in easing monetary conditions. Here, they noted that the options-implied modal path and the futures-implied average path had increased since their last meeting, indicative of how markets are considering that the Fed may have maintain monetary conditions higher for longer. Such views have been expressed not least in the wake of the Republican Sweep and views that some of Trump\u2019s policies including tax breaks, tariffs and deregulation could be inflationary. \u00a0 As such, notwithstanding today\u2019s forecasted rate cut, market participants have downwardly revised the degree of rate cuts moving forward. Including today\u2019s rate cut, markets are implying that two 25bps cuts by September.<\/p>\n <\/div>\n <\/div>\n <\/div>\n<\/div>","protected":false},"excerpt":{"rendered":"

This morning, data from the ONS indicated that headline inflation rose to 2.6% in November, marking the index\u2019s highest level in eight months…<\/p>","protected":false},"author":15,"featured_media":4539,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"rp-language":[16],"class_list":["post-11053","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-morning-updates","rp-language-en_gb"],"_links":{"self":[{"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/posts\/11053","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/comments?post=11053"}],"version-history":[{"count":2,"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/posts\/11053\/revisions"}],"predecessor-version":[{"id":11055,"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/posts\/11053\/revisions\/11055"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/media\/4539"}],"wp:attachment":[{"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/media?parent=11053"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/categories?post=11053"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/tags?post=11053"},{"taxonomy":"rp-language","embeddable":true,"href":"https:\/\/hamiltoncourtfx.com\/es\/wp-json\/wp\/v2\/rp-language?post=11053"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}