| Time | Country | Event | Period | Previous value | Forecast | Actual |
|---|
| 07:00 | Germany | Gfk Consumer Confidence Survey | January | -27.6 | -27 | -25.1 |
| 07:00 | United Kingdom | HICP ex EFAT, Y/Y | November | 5.7% | 5.5% | 5.1% |
| 07:00 | United Kingdom | HICP, Y/Y | November | 4.6% | 4.4% | 3.9% |
| 07:00 | United Kingdom | HICP, m/m | November | 0% | 0.2% | -0.2% |
| 09:00 | Eurozone | Current account, adjusted, bln | October | 31.23 | 27.0 | 34 |
GBP fell against its major rivals in the European session on Wednesday as investors started to price in more rate cuts by the Bank of England in 2024 in response to cooler-than-anticipated UK inflation data for November.
The Office for National Statistics (ONS) reported that consumer prices in Britain rose 3.9% YoY in November, sharply decelerating from 4.6% YoY in October. This represented the softest annual increase in consumer prices since September 2021 and was well below economists’ forecast of a 4.4% YoY advance. Meanwhile, the core consumer prices, which strip out volatile food and energy costs, increased 5.1% YoY in November, down from 5.7% YoY in October. The slowdown was also much sharper than the 5.6% economists had predicted.
The November inflation report prompted investors to ramp up expectations that the BoE could begin reducing its interest rates as early as May next year. Before the release, the British central bank was seen to start its rate-cutting cycle in June next year.
Overall, markets now fully price in five 25-basis-point rate decreases by the BoE in 2024, which would bring the Bank Rate to 4.00% by the end of the year, Bloomberg reports. The probability of the sixth cut is now estimated at around 60%.