UK inflation tumbled to the lowest level in two years, prompting investors to firm up bets that the Bank of England will be able to cut rates as early as the Spring of next year.
Consumer prices rose 4.6% from a year earlier in October, down sharply from 6.7% in September and the slowest pace since 2021, the Office for National Statistics said Wednesday. The figures allowed Prime Minister Rishi Sunak to declare victory in his goal of cutting inflation in half in 2023.
“While it is welcome news that prices are no longer rising as quickly, we know many people are continuing to struggle,” Sunak said in a statement. “We must stay the course to continue to get inflation all the way back down to 2%.”
The drop was even sharper than the 4.7% reading economists had anticipated. It will strengthen expectations that the Bank of England is finished raising interest rates and refocus attention on a sharp slowdown in the economy.
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