Closing summary
Time for a recap
US inflation has edged down to 3.1% in November, as inflationary pressures ease in the American economy.
On a monthly basis, prices rose by 0.1% last month, despite a drop in energy prices.
And core inflation, which measures underlying price pressures, rose by 0.3% in the month and remained at 4% per annum.
Janet Mui, head of market analysis at wealth manager RBC Brewin Dolphin, says:
“US inflation data is broadly in line with expectations, with headline inflation slowing and core inflation steady at 4% on a year-on-year basis. The large disinflationary impact has already happened with the drop in energy prices and goods prices, so the last mile to 2% will be more gradual.
Services inflation remains sticky, as the labour market remains resilient. Going forward, we expect inflation to continue slowing as the labour market softens, but with bumps along the way. Rent inflation will be a big part of the puzzle, but leading indicators from more timely rents indices suggest things are cooling into 2024.
The inflation data makes it likely that the US Federal Reserve will leave US interest rates on hold at its meeting tomorrow:
In other news:
Pay growth in the UK has slowed, with average total pay growth dropping to 7.2% in the three months to October, from 8% a month ago.
With the economy stagnating, the Office for National Statistics said a marked decline in earnings growth in the three months to October had coincided with jobs becoming harder to find.
Workers have been warned to expect lower pay rises:
UK mortgage arrears have hit a six-year high in the three months to September, as high borrowing costs left more households struggling to meet their payments.
Phone, broadband and pay-TV companies will be banned from imposing inflation-linked price rises in the middle of a contract and must instead tell customers upfront and in “pounds and pence” about any price rises, under rules proposed by Ofcom.
Unilever, the maker of Marmite, Domestos and Vaseline, is to be investigated by the UK’s competition watchdog over concerns that consumers are being misled by the company’s “green” claims on some essential household products.
In a busy day for regulators, the FCA has warned investment platforms that they cannot retain interest on clients’ cash holdings if they’re also charging a fee to hold that cash.
And the rail regulator has fired a warning shot at purveyors of overpriced pasties and baguettes on Britain’s stations, suggesting that captive passengers are paying 10% over the odds in a stagnant market.
In the auto industry, France’s Renault has said it will sell 5% of its shares in Nissan, the first step in a plan to rebalance a troublesome partnership with the Japanese carmaker.
One of Britain’s biggest power grid projects has awarded contracts worth £1.8bn for a 190km subsea electricity superhighway to bring renewable power from Scotland to the north of England.
Updated
Yellen: Inflation is coming down 'meaningfully'
US treasury secretary Janet Yellen said on Tuesday she believes inflation is coming down “meaningfully”.
And with inflation expectations under control it should not be particularly difficult to finish the “last mile” of the job of easing price pressures, she argues.
“I see no reason, on the path that we’re currently on, why inflation shouldn’t gradually decline to levels consistent” with the Federal Reserve’s 2% target, Yellen said at the Wall Street Journal’s CEO Council Summit.
The economy continues to operate a “roughly full employment,” she said (via Reuters).
