UK CPI rose to a 5 ½ year high - Scotiabank

Analysts at Scotiabank explained that the UK CPI rose more quickly than expected in Nov, with headline CPI gaining 0.3% in the month, pushing the headline rate to 3.1%.

Key Quotes:

"UK CPI rose to a 5 ½ year high and crossing the threshold which requires BoE Governor Carnet to write a letter to the Chancellor to explain what is going on and what he will do about above target inflation. 

The pop in prices makes for an interesting run into Thursday’s BoE decision though policy is widely expected to remain on hold this week. 

Sterling is little changed and UK rate expectations for early 2018 have not increased materially following the data. 

The risk of a slightly more hawkish tone to the BoE’s commentary is a risk, however."