"Surprising UK Inflation Drop Fuels Speculation of Early Bank of England Rate Cuts"
TL;DR Summary
UK inflation dropped to its lowest rate in over two years in November, surprising economists and bolstering expectations of an interest rate cut by the Bank of England in the first half of next year. The annual rate of consumer price increase fell to 3.9% from 4.6% in October, driven down by cheaper petrol. Investors now fully price in a rate cut by May 2024 and see a nearly 50% chance of a cut by March. The pound and British government bond yields also fell. While UK inflation is no longer an outlier internationally, it remains higher than other advanced economies.
Topics:business#bank-of-england#consumer-prices#economic-outlook#economy#interest-rates#uk-inflation
- Big UK inflation drop bolsters bets on Bank of England cuts early next year Reuters UK
- U.K. Inflation Unexpectedly Cools to 3.9%, Lowest in 2 Years The New York Times
- Cheaper mortgages to ease cost of living pain The Times
- Dollar higher as big UK inflation drop hits pound CNBC
- UK interest rates expected to fall sharply next year as inflation drops to 3.9% The Guardian
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