Consumer Prices (Nov.)

The sharp fall in inflation from 0.7% in October to 0.3% in November (consensus 0.6%) and in the core rate from 1.5% to 1.1% came as a bit of a surprise. However, some of these moves were driven by one-off factors, so we still expect inflation to rise temporarily back towards the 2% target next year. Beyond that, we expect inflation to settle at 1.5%. That is unless a no deal Brexit pushes it up to a peak of 3-4%.