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Inflation hits 2.6% - markets and investors

ended 18. December 2024

The Consumer Prices Index (CPI) rose by 2.6% in the 12 months to November 2024, up from 2.3% in the 12 months to October. Other key points below. What impact could this have on the markets, the Pound and how could it impact savers? 

  • On a monthly basis, CPI rose by 0.1% in November 2024, compared with a fall of 0.2% in November 2023.
  • The Consumer Prices Index including owner occupiers' housing costs (CPIH) rose by 3.5% in the 12 months to November 2024, up from 3.2% in the 12 months to October.
  • On a monthly basis, CPIH rose by 0.2% in November 2024, compared with a fall of 0.1% in November 2023.
  • The largest upward contribution to the monthly change in both CPIH and CPI annual rates came from transport, with a further large upward effect in CPIH from housing and household services.
  • Core CPIH (excluding energy, food, alcohol and tobacco) rose by 4.4% in the 12 months to November 2024, up from 4.1% in October; the CPIH goods annual rate rose from negative 0.3% to positive 0.4%, while the CPIH services annual rate rose from 5.6% to 5.7%.
  • Core CPI (excluding energy, food, alcohol and tobacco) rose by 3.5% in the 12 months to November 2024, up from 3.3% in October; the CPI goods annual rate rose from negative 0.3% to positive 0.4%, while the CPI services annual rate was unchanged at 5.0%.

2 responses from the Newspage community

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Kundan Bhaduri
Entrepreneur, Investor and Landlord at The Kushman Group
The recent rise in inflation to 2.6% highlights a pivotal moment for markets, savers, and the Pound. While a 0.3% monthly increase may seem modest, the larger annual shifts in CPIH, particularly from housing and transport, are painting a more significant picture of economic pressure on households. For markets, this steady uptick could fuel speculation of further interest rate hikes by the Bank of England, likely impacting investor confidence and bond yields. As for the Pound, the inflation increase could provide temporary strength, but ongoing volatility remains a concern if policy decisions don’t align with market expectations. For savers, this creates a double-edged sword: rising inflation erodes real savings, while higher interest rates offer improved returns on cash deposits. The key now lies in balancing these competing factors, ensuring savers and investors remain resilient. How we navigate these pressures will shape the UK economy in 2025 and beyond.
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David Belle
Founder and Trader at Fink Money
We are firmly in stagflation territory. And that's serious. It's not really that surprising with Rachel Reeves heading up the economy, as she is clearly out of her depth. What will be interesting is if we have a technical recession going into the spring Budget, because this would mean Labour’s entire economic manifesto is proven to be nonsense, especially when the Tories had such fantastic growth during the first half of 2024.