Inflation is expected to soften a little on an annual basis
Headline inflation is expected to slow to +2.3% y/y from +2.4% y/y in October while the core reading is also expected to come in softer at +1.8% y/y relative to the +1.9% y/y reading in October. There will also be PPI figures released at the same time but they are very much second-tier data.
Anyway, with Brexit uncertainty still clouding the pound's outlook, expect inflation readings here to not have a lasting impact on the quid as any pricing towards a BOE rate hike is still frozen as long as the Brexit fog isn't lifted.
Despite the release here being one of the more key data points the central bank focuses on, there is still some way to go before they can actually consider rate hikes again. And as mentioned above, as long as Brexit uncertainty persists, economic data for the pound will remain secondary to Brexit sentiment as the latter has the more immediate and larger impact on price movement.
So yes, we may see slightly softer inflation figures or even better-than-expected ones, but the data here will do little to change market sentiment - and price trends - at this point in time.
