UK inflation drops to 4-month low, paving way for December rate cut

2 days ago 4

Associated Press Finance

Wed, November 19, 2025 astatine 5:01 AM CST 1 min read

LONDON (AP) — Inflation successful the U.K. fell to a four-month debased successful October, authoritative figures showed Wednesday, successful a determination that has raised expectations of different Bank of England involvement complaint chopped adjacent month.

The Office for National Statistics said the yearly complaint of inflation, arsenic measured by the user prices index, fell to 3.6% successful October from 3.8% the erstwhile month.

Though the complaint was the lowest since June, it was a spot higher than the 3.5% that astir economists were forecasting for the month. The main downward power came from home vigor bills, portion a rebound successful nutrient prices partially offset that.

Even though ostentation remains supra the bank's 2% target, economists said policymakers volition apt authorisation a quarter-point complaint chopped astatine their adjacent gathering connected Dec. 18, particularly arsenic the labour marketplace has weakened and economic maturation has stalled.

The latest ostentation speechmaking comes a week earlier Treasury main Rachel Reeves delivers her long-anticipated budget, successful which she is wide expected to rise taxes to capable a multibillion-pound shortfall successful the nationalist finances.

Following the ostentation data, Rachel Reeves said she was readying to instrumentality “targeted action” successful her fund to assistance easiness the outgo of living.

“Though the conditions for a December involvement complaint chopped are falling into place, the Budget is simply a past obstacle arsenic rate-setters volition privation to gauge the effect of the policies announced earlier authorising different complaint reduction," said Suren Thiru, economics manager astatine accounting institute ICAEW.

Earlier this month, the slope kept its main complaint unchanged astatine 4%, with a wafer-thin bulk of policymakers needing much accusation connected however swiftly ostentation volition autumn backmost towards their people earlier backing different chopped successful borrowing costs.