Fynsa
During 2025, and also 2024, monthly price movements have been crazy. Looking at the year-on-year figures, this does not seem to be the case, but monthly volatility has been higher than usual. It does not take a very complex analysis to see that one of the main culprits of this volatility (but not the only one) is cyber days, which, although not new, have become a more permanent feature of retail sales strategies.
This is how we have recognized certain patterns at the product level, which in some cases can scale up to more concentrated groups within the basket, although not necessarily in all cases. Thus, in the month prior to a cyber day, we observe how some goods increase in price unusually, slightly but continuously. Examples of this can be seen in technological goods, home equipment, and personal care. Then, during the month when offers and promotions are applied, the price of these products falls, with a significant impact on the index, although this is often offset by other factors affecting the economy, such as food or fuel prices. Finally, in the following month, a "normalization" is observed, causing the same effect described above, but with the opposite sign.
During November, we observed this latter effect, which caused increases in goods and services that can hardly be attributed to any particular market condition and appear to be simply this new seasonal behavior. Thus, the CPI rose 0.3% compared to the previous month, which was within our expectations, although slightly above what the market and the prices implied in financial assets (0.2%) had expected. With this, the year-on-year variation remained at 3.4%, increasing expectations that the elusive 3.0% will soon be reached.
Even in underlying terms, things behaved "as they should," posting a monthly increase of 0.2% and remaining at 3.4% year-on-year. Although the increase was not uniform when broken down between goods and services, we see no reason to believe that this poses an emerging risk that calls for greater caution.
Our overall analysis of activity and prices continues to suggest that the most reasonable course of action for the Central Bank is to cut the benchmark rate by 25 basis points at its next monetary policy meeting, which would bring the MPR to 4.50% at the end of 2025. It would then have room for a further cut in early 2026, reaching 4.25%, a level we consider neutral. In terms of communication, we believe this would be a wise move, as inflation will most likely reach 3.0% in February (data available in early March), before the first IPoM of 2026.
