U.S. consumer prices unchanged in November

The ONS figures showed petrol prices continued to slide November though its effect on inflation was positive as it failed to match declines in the same month previous year. The CPI increased 0.5 percent before seasonal adjustment over the past 12 months.

The Office for National Statistics (ONS) said the rate of Consumer Prices Index (CPI) inflation rose to 0.1% in November, ending two months in a row of mild deflation.

Prices, as measured by the consumer prices index (CPI (Other OTC: CPICQ – news) ), rose by 0.1pc in the year to November.

In the 12 months through November, the CPI increased 0.5 percent, the largest gain since last December, after rising 0.2 percent in October. The Fed targets 2 percent inflation and it tracks an index that is running far below the core CPI.

Analysts see a more than 70 percent chance that rates will be raised at the two-day meeting, with the Federal Reserve concluding that the USA economic recovery is sound. Once again this places little pressure on the Bank of England to lift interest rates.

The fall in prices of all the major components in the energy index except electricity kept inflation unchanged.

The ONS says movements in transport costs, alcohol and tobacco prices were the main contributors to the rate rise, while falling clothing prices suppressed a further increase.

British inflation returned to positive territory for the first time in four months in November, but remained close to zero as it has for most of this year, official figures showed on Tuesday.

The Bank of England has already forecast that inflation is likely to remain below 1% until the second half of next year. Food prices are also down 0.1%, as prices for chicken, meat, fish and eggs decline. Core good inflation dropped by 0.2% m/m and 0.6% y/y was offset by rise in core service inflation of 0.3% m/m and 2.9% y/y.

The biggest drivers have been higher costs for medical care and shelter, such as rent or the cost of buying a home.

Richa Gupta, Senior Director, Deloitte in India, said that pulses were the “main culprit” in the food basket with prices moving up by 4.39 per cent over the last month despite the Centre’s efforts to tame the price rise.

Such a small move in the year-on-year rate in November would normally be a case of “steady as she goes”.