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[Quick Facts]

1. Pill: BOE will not relent in inflation battle.

2. Canada's retail sales jump 0.6% MoM in sharp spending rebound.

3. Muller: ECB probably won't need to raise rates again.

4. A temporary Israel-Hamas truce takes effect.

[News Details]

Pill: BOE will not relent in inflation battle

Despite signs that the British economy is weakening, the central bank will not relent in the fight against inflation, the Bank of England's (BOE) chief economist Huw Pill said in a speech last Friday. Domestic inflationary pressures such as wage growth and services inflation remain at very high levels.

The slower growth in economic activity is more supply-driven rather than demand-driven, which means that the weakening of activity is not as associated with the easing of inflationary pressures. "The challenge for the monetary policymaker is to ensure that there is enough persistence in the restriction of monetary policy to bring the domestic components of inflation down. And to do this at a time when there would be lots of pressure in the face of weaker employment and activity growth and declining headline inflation, to declare victory and move on," he added.

Canada's retail sales jump 0.6% MoM in sharp spending rebound

On November 24, Statistics Canada released data showing that Canada's retail sales increased 0.6% in September, far exceeding the market's expectations of 0%. Four of the nine sub-sectors saw sales growth, with automobile and parts dealers seeing the largest increase in sales, up 1.5% in September. Retail sales excluding autos rose 0.2%, compared to expectations for a 0.1% decline. While the overall numbers rebounded sharply, details in the report show that spending remained slightly weak. Core retail sales excluding gas stations and auto dealers fell 0.3% in September. The decline was led by lower sales at sporting goods, hobby and musical instrument retailers as well as beer, wine and liquor stores, suggesting consumers cut back on some discretionary purchases.

Muller: ECB probably won't need to raise rates again

In a speech on Saturday, Nov. 25, European Central Bank (ECB) Governing Council member Madis Muller said that the ECB probably won't need to raise interest rates again. While inflation is clearly showing a trend of slowing, it isn't quite at the ECB's 2% goal yet, he said, adding that high rates are a "smaller problem" than high inflation.

A temporary Israel-Hamas truce takes effect

A temporary truce between Israel and Hamas came into effect, and the two sides made the first and second rounds of exchange of detainees. Hamas said it was committed to reaching a "comprehensive exchange agreement" and completely lifting the blockade of Gaza. Israeli Prime Minister said he was committed to the release of all Israeli detainees and would welcome extending a temporary truce if it meant that on every additional day 10 captives would be freed.

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