The UK Producer Price Index report is set to fall for the fourth consecutive month in November, shedding -0.6% to bring the annualized growth rate to an 11-month low at 5.2%. This will mean that the pace of PPI growth slowed a staggering 47% in just four months having peaked with commodities in July. Falling production costs are expected to be passed on (at least in part) to consumers by way of a lower price for the final good, slowing consumer inflation and giving the Bank of England room to continue cutting interest rates. The
BOE cut borrowing costs by a full percentage point last week and is expected to offer another 25-50 basis points in easing at the next
monetary policy meeting on January 7, 2009.
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