UK Inflation Slows Sharply, Boosting BoE And PM Sunak

• In October, British inflation unexpectedly dropped to 4.6% from 6.7% in September. This was primarily attributed to a decrease in household energy prices and a general softening of price pressures. Following the release of the data, investors increased their expectations of future Bank of England (BoE) rate cuts.
• Finance Minister Jeremy Hunt hinted at moving to the next phase of the economic plan, focusing on the long-term growth of the British economy. He is expected to announce investment incentives for businesses in a budget update on November 22.
• Despite the decline, the BoE warns that the last phase of reducing inflation might be challenging, projecting a return to the 2% target by late 2025. Furthermore, Britain still has the highest rate of consumer price growth among Group of Seven nations, narrowly above France.
• However, with the U.S. Federal Reserve and European Central Bank seemingly reaching peak interest rates, the global economic landscape suggests a broader trend of economic slowdown and uncertainty. Investors are increasingly betting on BoE rate cuts in the coming year.

(Source: Reuters)