United Kingdom inflation falls slightly in October

The consumer price index increased 0.2 percent in October after a 0.2 percent decline the previous month, the Labor Department said Tuesday. The cost of living has risen in October, and this is good news because it is the first rise in two months.

Bank of America, Citigroup, Wells Fargo and JPMorgan Chase have generally outperformed the overall market since the Fed's relatively hawkish statement on October 28, followed by other Fed hints of a looming rate "liftoff".

Economists at J.P. Morgan said October's data showed inflation beginning to turn upward. Excluding the volatile food and energy categories, so-called core prices grew 0.2%, the same as in September.

In the 12 months through October, the CPI advanced 0.2 percent after being unchanged in September.

Analysts note that the only Fed target that has not yet been hit is 2 percent inflation, but with the CPI in line with expectations, they believe that a December rate hike is likely.

Inflation has been at or close to zero for nine months and is at the lowest level since March 1960.

The firm CPI number offers more support to expectations that the Federal Reserve will raise interest rates next month. That's up from 2.3% in September and 2.0% in August.

"Next week's Comprehensive Spending Review is the ideal opportunity for the Chancellor to deliver a stronger recovery by launching an ambitious plan to build affordable homes and upgrade our ageing transport and energy networks". Airline fares rose 1.5 percent, ending a string of three consecutive declines.

"However, aside from these base effects there is little reason to expect any significant build-up of inflationary pressures". Gold and the dollar typically move in opposite directions, which means if the dollar goes up, gold futures will fall as gold, measured by the dollar, becomes more expensive for investors. Rents and medical costs accounted for much of the increase in the core CPI last month. At 107.2 percent of its 2012 average, total industrial production in October was 0.3 percent above its year-earlier level. The core CPI reading actually came in at 1.9% on the year-over-year reading for October. The steep drop in oil prices has been a major factor in the low inflation over the past year. Medical care prices rose 0.7%, the largest increase since April. and hospital costs increased by 2%.

On the other hand, the Labor Department said prices for apparel, new vehicles, household furnishings and operations, and used cars and trucks all declined.