BUSINESS LIVE: CPI drops to 3.9%; Takeover bid for Kin and Carta increased; Home REIT value drops

Thomas Pugh, economist at RSM UK:

'Inflation is now almost a full percentage below the forecast that the MPC only made in November. If this trend continues, it indicates that the MPC could start cutting rates as early as May.

'The sharp fall in inflation will also be important for the labor market. Real wage growth will pick up sharply in the fourth quarter, which should help the economy avoid a recession at the end of the year. The sharp decline in November should also help anchor inflation expectations to sluggish nominal wage growth, reducing one of the key risks to the MPC.

'Inflation is likely to hover around current levels for the rest of the year before falling again in the spring. While today's numbers are good news for the economy, it's still worth being cautious. Services inflation, at 6.3%, is still far too high for the MPC to be comfortable with, and unless wage growth slows sharply, the MPC may not be willing to cut rates once the market prices this in now.”

A third of British top executives have considered moving their stock exchange listing abroad, according to figures that represent a new blow to the London stock exchange.

Findings from consultancy Teneo show that 32 per cent of bosses have discussed the possibility of leaving the UK market with their board.

It comes a day after a senior executive at US stock exchange Nasdaq admitted it was looking for more British companies to list in New York.

Ed Monk, deputy director at Fidelity International:

'Another significant drop in inflation in November only contributes to yields falling faster than expected. The Bank of England has made some tough statements, but price increases appear to be declining rapidly towards the Bank's target range, and the risk to rate setters may soon be tightened not too little, but too much.

'The tail end of above-target inflation may still be difficult to shift – wages may have peaked but remain high by historical standards – and the Bank of England will want to be sure there is sufficient demand from the economy has trickled down before credit is eased. cost.

'For investors, the current decline in inflation is good news and could contribute to the momentum in the markets that has developed in recent months. However, markets are priced for perfection, with inflation returning to target next year without triggering a recession. Anything less than that could mean a sharp correction from current market levels.

'The further decline in inflation means that money savers must continue to see a real return on their money. However, savers need to understand that falling inflation will not only benefit returns on cash, but also those on risky assets such as stocks, whose returns have far surpassed those on cash accounts this year.'

Consumer price inflation fell to 3.9 percent in November, down from 4.6 percent in October and lower than economists forecast of 4.4 percent, new data from the Office for National Statistics showed.