From Morningstar: 2024-10-16 05:00:00

The UK inflation rate for September fell to 1.7%, below the 1.9% forecast and Bank of England’s 2% target. Core inflation, excluding certain items, also dropped to 3.2%. Weakness in transport, plane fares, and petrol prices were cited. Expert opinions suggest increasing interest rate cuts beyond November.

ING economists believe the Bank of England’s decision-making on inflation persistence is linked to the fall in services inflation. They predict a series of rate cuts, possibly until rates hit 3.25% next summer. RBC Brewin Dolphin’s chief strategist suggests a faster cadence of interest rate cuts may be necessary due to recent inflation data.

Inflation peaked above 11% in 2022 and has significantly dropped since. Interest rates have been cut globally in response to falling inflation. The Bank of England anticipates maintaining a restrictive monetary policy to control inflation, with expectations for further rate cuts in upcoming meetings. Eurozone inflation is also falling, potentially leading to an ECB rate cut on Oct. 17.



Read more at Morningstar: Fall in UK Inflation Supports November Rate Cut Bets