The UK Office for National Statistics announced on December 17 (local time) that the country's Consumer Price Index (CPI) inflation rate for November was recorded at 3.2% year-on-year.
This figure is not only lower than last month's 3.6%, but also falls well below the average market forecast for this month. The slowdown in inflation was driven by falling food and tobacco prices, as well as Black Friday clothing discounts.
The service price inflation rate also dropped to 4.4%, down from 4.5% in October. The core inflation rate, which excludes food and energy, declined from 3.4% to 3.2%.
As a result, expectations are growing that the Bank of England (BOE) will cut its base interest rate by 0.25 percentage points to 3.75% on December 18. The employment statistics released the previous day showed that the unemployment rate from August to October rose to 5.1%, the highest level since early 2021, while the wage growth rate slowed slightly, both of which were cited as signs of an economic slowdown.
Rob Wood, Chief UK Economist at Pantheon Macroeconomics, stated, "There is now no doubt that the Monetary Policy Committee will cut rates tomorrow."
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