A big drop in headline inflation has given a boost to global markets. After several months of meagre reductions, UK CPI inflation dropped from 6.7% to 4.6% in October. The slowdown was more than expected as lower domestic energy costs took effect. US headline inflation also fell more than expected as CPI dropped to 3.2% from 3.7%. However, core inflation (excluding volatile energy and food prices) remains sticky. Core US inflation fell from 4.1% to 4%, and core inflation in the UK fell from 6.1% to 5.7%.
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