Skip to content

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

Sterling sinks as inflation tumbles in the UK

The UK consumer price headline inflation rate has fallen to 3.9% in the year to November, from 4.6% in October, a bigger dip than expected.

Video poster image

This takes the CPI rate to its lowest it's been in more than two years and will go a long way in helping the Bank of England to cut rates in 2024. The slowdown in inflation was caused by a drop in petrol prices, with motor fuel prices fell by 10.6% in the year to November, compared with a fall of 7.6% in the year to October. Second-hand cars, maintenance and repairs, and air fares also dragged the figure down. Excl food and fuel, the core rate was down from 5.7% to 5.1%, again beating the forecast for a drop to 5.6%.

(AI Video Transcript)

The UK's inflation rate

The UK's inflation rate for November was lower than expected, at 3.9%, down from 4.6% in October. This is the lowest inflation rate in over two years and was mainly caused by a decrease in petrol prices. Other factors that contributed to the drop in inflation include lower second-hand car prices, maintenance and repair costs, and airfares. Motor fuel prices fell by 10.6% in the year leading up to November, compared to a 7.6% decrease in the previous year. The core rate, which excludes food and fuel, also decreased from 5.7% to 5.1%, beating the predicted 5.6%.

The Bank of England

Although producer prices fell, it was not as significant as expected, with a decrease of 0.2% compared to the expected 0.5% decrease. Retail prices increased by 5.3%, which is lower than the expected 5.7%. Overall, inflation is slowing down quite a bit. This news has had an impact on the markets, especially on the value of the Pound Sterling. It is predicted that the Bank of England now has room to lower interest rates, which have been negatively affecting economic growth. This potential interest rate cut and lower mortgage rates could boost consumer confidence.

GBP/USD

Looking at the currency market, the GBP has decreased in value against the USD and the EUR. On the daily chart, there is a significant decline in the Pound against the Euro and a slight decrease against the US Dollar. However, despite the drop, the Pound has managed to stay above a support level against the weaker US Dollar. Overall, the decline in the Pound's value has not had a significant impact on its recent positive performance.

EUR/USD

In simpler terms, the cost of living in the UK in November was not as high as expected. This is because things like petrol, second-hand cars, and flights were cheaper. Due to these lower prices, inflation in the UK has gone down. This means that the value of the Pound has also gone down compared to the EUR/USD. However, this decline in the Pound's value hasn't affected it too much and it is expected to recover. The lower inflation rate gives the Bank of England a chance to lower interest rates, which could help the economy and make it easier for people to borrow money.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Start trading forex today

Find opportunity on the world’s most-traded – and most-volatile – financial market.

  • Trade spreads from just 0.6 points on EUR/USD
  • Analyse with clear, fast charts
  • Speculate wherever you are with our intuitive mobile apps

See an FX opportunity?

Try a risk-free trade in your demo account, and see whether you’re onto something.

  • Log in to your demo
  • Take your position
  • See whether your hunch pays off

See an FX opportunity?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Get spreads from just 0.6 points on popular pairs
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See an FX opportunity?

Don’t miss your chance. Log in to take your position.

Live prices on most popular markets

  • Equities
  • Indices
  • Forex
  • Commodities
website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.

" >


Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Sunday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.


For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.