UK inflation slowed significantly in November, boosting market expectations that the Bank of England may opt for a rate cut at its final policy meeting of the year. Annual consumer price growth fell from 3.6% in October to 3.2%, marking an eight-month low, though still above the BOE’s 2% target.
On a monthly basis, the CPI slipped 0.2%, while core inflation also eased, with the yearly rate cooling to 3.2%. The figures reinforce the trend of moderating price pressures after a prolonged period of high inflation, which peaked at 11.1% in late 2022.
Investors now see a stronger case for policy easing, especially after recent data showed the unemployment rate rising to its highest since early 2021 and the government rolling out measures to ease household living costs. Analysts expect Thursday’s BOE meeting to result in a narrow vote in favor of reducing borrowing costs to 3.75%, which would mark the lowest level since early 2023.