US CPI Sees First Rise in 3 Mos

Core inflation – which strips out volatile price movements in energy and food and is considered to be a better gauge of domestic price pressures – rose slightly from 1pc to 1.1pc.

Britain has been skirting with “noflation” since the start of the year, with CPI hitting 0pc four times over the last ten months.

Signs of stabilisation in prices after a recent downward spiral are likely to be welcomed by Fed officials and give them a few confidence that inflation will gradually move towards the central bank’s 2 per cent target.

“The core has been pretty solid”, said Stephen Stanley, chief economist at Amherst Pierpont Securities LLC in Stamford, Connecticut, who correctly projected the gain in core prices.

Last month’s readings matched the median forecast in a Bloomberg survey of 82 economists. Core inflation was steady at 1.9%, unchanged from September’s pace.

From a year earlier, overall prices rose just 0.2 per cent, largely held down by a 17.1 per cent year-over-year decline in energy prices.

Shelter prices rose 0.3% from September, bringing the year-over-year increase to 3.2%.

Inflation numbers are due on Tuesday and forecast by Reuters polling to show a 0.1 percent fall in prices in annual terms.

Sterling fell 0.3 percent to $1.5198, holding in the middle of the past week’s ranges.

A basket of goods and services that cost £100 a year ago would now be a little cheaper at the cost £99.90, as measured by Consumer Prices Index (CPI). Airline fares soared 1.5% in the past month.

The latest data on inflation, through the consumer price index (CPI) is set for release at the bottom of the hour. The average cost of a gallon of regular gasoline was $2.16 on November 15, according to AAA, the biggest US auto group. In case a greater-than-projected acceleration in consumer prices is reported, this would have a strong bullish effect on the United States dollar and a strong bearish effect on gold respectively, as it would bolster prospects of an interest rate hike in December.

USA stocks rebounded strongly on oil recovery Monday, following the terror attacks in Paris on Friday, as investors believed its impact on markets was limited. The dollar’s 18% rise against the currencies of the United States’ main trading partners since June 2014 has made imported goods less expensive, weighing on prices of goods such as apparel and automobiles.

The BOE has never faced such a lengthy period of below-target inflation since it began aiming for 2% annual consumer- price growth in 2003, according to ONS records.

GBP/USD was last at 1.5206 from around 1.5173 ahead of the report.