I had the data and its implications posted up yesterday as it hit:
- UK shop prices fell in October for the first time in seven months, driven by the biggest decline in food prices since 2020
- The Bank of England, which closely watches food prices due to their influence on public inflation expectations, may take some comfort from the data following official figures last week showing headline inflation steady at 3.8%.
That largest drop in UK food prices in 5 years reverberated on Tuesday, UK and US time:
- keep the prospect of a December Bank of England rate cut on the table ... not locked in for sure, but markets are pricing around a 65% probability now
- there is room for further dovish repricing, which will conitnue to act as a headwind for GBP
