UK FISCAL: Public finance data shows notable corporate tax downward revisions

• RES 4: $71.38 - High Jun 23 and a key medium-term resistance 
• RES 3: $67.16 - High Jul 30
• RES 2: $65.33 - High Sep 26 and key resistance 
• RES 1: $61.84 - High Oct 24    
• PRICE: $60.42 @ 07:18 GMT Nov 19 
• SUP 1: $55.99 - Low Oct 20 and bear trigger
• SUP 2: $55.33 - Low May 1
• SUP 3: $54.72 - Low Apr 9 and a key support
• SUP 4: $53.53 - 1.764 proj of the Jul 30 - Aug 13 - Sep 26 price swing   

WTI futures are trading in a range. A sell-off on Nov 12 strengthens a bearish theme. A continuation lower would pave the way for a move towards key support and the bear trigger at $55.99, the Oct 20 low. Clearance of this level would resume the downtrend. Note that it is still possible a bullish corrective cycle remains in play. Resistance to watch is $61.84, the Oct 24 high. Clearance of this hurdle would signal scope for a stronger correction.

• Is this data enough for Bailey to vote for a December cut? Headline, services and food all saw marginal downside surprises to the BOE's forecast and as we have noted since the November MPC meeting, we think that if data comes broadly in line with Bank projections and we don't get an inflationary Budget we will likely see Bailey support a cut. This also follows softer labour market data last week. There is still uncertainty over next week's Budget, however.
• GBPUSD is broadly where it was before the data now - and we wouldn't expect this data to really drive notably moves on either SONIA markets (which price just under 19bp for December) or gilts.

Only real notable surprise seems to be in air fares and passenger transport - that accounts for the downside services surprise and may not be permanent. Core goods a little stronger. Food as mentioned above was an upside surprise to consensus but downside to the BOE - and that with some small energy impacts probably helped the marginal headline upside surprise.

• Electricity, gas and other fuels contributed -0.23ppt to the change in headline CPI - that was expected at around -0.25ppt so broadly in line and driven by the Ofgem price cap, but saw the marginal upside bias that we had expected and pointed out that the sellside wasn't fully accounting for fixed price tariffs here, That was also a 2 hundredth upside surprise for the BOE.
• Fuels and lubricants added 0.07ppt - that was a hundredth higher then the BOE forecast.
• Air fares contributed -0.03ppt to the change in headline CPI (around -0.06ppt to services). Analyst expectations had been for around -0.03ppt to +0.05ppt to headline CPI (-0.06ppt to +0.10ppt services) - so as we noted above that is the bottom of the expected range. We don't know what the BOE was expecting here.
• Passenger transport by sea and railway were also softer - the wider transport services knocked 0.07ppt from headline CPI (of which the 0.03ppt was air fares).
• Accommodation services had expected to soften - and they did knocking 0.06ppt off headline CPI. Broadly as expected.
• Restaurants and cafes picked up above their 3.9-4.2%Y/Y range they had been in since February - but only to 4.4%Y/Y. This contributed +0.03ppt to headline CPI. May not have been fully expected.
• Educations contributed 0.02ppt (tuition fees and largely expected).
• Cultural services contributed 0.04ppt - we had pencilled in 0.03ppt from some reversal of last month.