October UK inflation at +3.0% remains at its highest level for more than five years. The Office for National Statistics confirmed the numbers earlier; no change from September. Food, not fuel, is now the focus. That’s because the price of food and non-alcoholic drinks climbed to 4.1% – the highest clip for more than four years (vegetable price inflation is at 5.7%).
So some worry for grocer retailers who won’t want to raise food prices as the festive season looms closer. However there was a bit of cheer for input price inflation, the metric companies use for the cost of raw materials, slipping from 8.1% to 4.6%.
Flailing UK wage inflation will land tomorrow and the figures will surely lag well behind the CPI benchmark, especially hard for low-income families.
By mid-afternoon the pound had barely moved against the dollar at 1.3122; the euro though was +0.76% up against the greenback – a two-and-a-half-week high – at 1.1756 thanks to surging German economic confidence.
For the third quarter the Germany economic output lifted +0.8% new data revealed this morning. This was a substantially better number than had been anticipated. Eurozone GDP data will be issued tomorrow; the strong German numbers may indicate more euro buoyancy tomorrow.
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Honda and Aston Martin warn on Brexit non-deal
More pressure today on Theresa May to secure a Brexit deal, this time from the UK car industry. Honda and Aston Martin bosses have warned that the possibility of the UK quitting the EU without a secure trade and customs deal would be catastrophic.
Most car manufacturers now use just-in-time production logistics, dependent on ultra-quick sourcing of parts from suppliers. If those parts are subject to custom delays than that is a huge issue.