Inflation in the U.K. dropped to a four-month low in October, reaching 3.6%, raising expectations for a Bank of England interest rate cut next month. Despite being slightly higher than forecasts, lower energy bills contributed to the decrease, while food prices rose. Economists anticipate a rate cut on Dec. 18 due to weakened labor market and stalled economic growth.

Treasury chief Rachel Reeves is expected to raise taxes in her upcoming budget to address a multibillion-pound deficit. Following the latest inflation data, Reeves mentioned plans for “targeted action” to reduce the cost of living. The Bank of England kept its main rate unchanged at 4%, awaiting more information on inflation before considering further rate cuts.

Read more at Yahoo Finance: UK inflation drops to 4-month low, paving way for December rate cut