**As seen in Risk In The Week report 11/10/23, subscribe at cablefxm.co.uk/reports
U.K. September consumer prices rose 6.7% Y/y, this was unchanged from the prior figure and above market estimates of 6.6%. The core metric eased from the prior to 6.1% Y/y but was faster than the expected 6.0%. The closely watched services CPI accelerated to 6.9% Y/y from the prior 6.8%, the number was above the consensus median of 6.8%. While the upside surprise did not move the needle for the BoE, the report came to question the preceding deflationary progress, as the September monthly pace was the fastest since May. Economists at Deutsche Bank claimed that October price data is set to record a sharp decline, their proprietary model points to the headline dropping about 200bps to 4.74% Y/y, and they penciled the core figure at 5.81%. Looking ahead, the Deutsche Bank Price Survey Tracker is currently pointing towards a further 150bps drop in prices by the springtime, they said U.K. headline inflation is likely to print closer to 3% Y/y by April 2024.
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