GBP
Yesterday’s figures showed plunging oil prices are starting to feed through to
UK consumers’ pockets after inflation fell to just 1% for the first time in 12
years last month. 

Oil prices have fallen about 45 percent this year, pushing down energy costs
across the world and helping to boost consumers’ spending power. While it also
gives the Bank of England scope to keep interest rates at a record low,
Governor Mark Carney said today there are potential financial-stability risks

GBP
Yesterday’s figures showed plunging oil prices are starting to feed through to
UK consumers’ pockets after inflation fell to just 1% for the first time in 12
years last month. 

Oil prices have fallen about 45 percent this year, pushing down energy costs
across the world and helping to boost consumers’ spending power. While it also
gives the Bank of England scope to keep interest rates at a record low,
Governor Mark Carney said today there are potential financial-stability risks
associated with a continued drop.

The figures fuelled expectations that policy makers are at least a year away
from raising interest rates
Inflation is now on the brink of straying more than a percentage point from the
Bank of England’s 2 percent target, which would require Carney to write a
letter of explanation to Chancellor of the Exchequer George Osborne. 

In its Financial Stability Report today, the BOE noted the drop in the oil
price could undermine stability if it prevents companies such as exploration
firms from servicing debts or if the decline jeopardizes inflation
expectations. 

EUR
Germany’s benchmark investor sentiment survey surged to a multi-month high, the
ZEW Institute said Tuesday, adding further evidence that Europe’s biggest
economy may have climbed out of its third quarter trough The figure is the
highest level since May at 34.9 and far above the median estimate of
 18.0

One of Germany’s largest banks has also suggested that the unexpected drop in
oil prices could add up to 0.2 percentage points to GDP in  its latest
forecast for Germany, which anticipates growth of 1.0 in 2015.

Key Announcements:
GBP – 09:00: BOE’s MPC vote expected to stay unchanged at 7-2 
GBP – 09:30: UK ILO unemployment rate (Oct) expected to be lower at 5.9%
from 6.0% 
EUR – 10:00: Eurozone Inflation (Nov) expected to be lower at 0.3% from 0.4%
USD – 13:30: US inflation ( Nov) expected to be lower at -0.1% 
USD – 19:00: US Federal Reserve interest rate decision expected to be
unchanged at 0.25% 

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