U.K. inflation cooled more than expected in November, increasing the likelihood that the Bank of England will cut interest rates at its final policy meeting of the year on Thursday.
According to the Office for National Statistics, consumer prices rose 3.2% year over year in November, down from 3.6% in October and below economists’ expectations of 3.5%. Core inflation, which excludes energy, food, alcohol, and tobacco, also slowed to 3.2% from 3.4%.
Lower food prices were the main factor behind the decline, alongside easing prices for clothing and tobacco. The data follows a separate report showing the U.K. unemployment rate climbed to 5.1%, highlighting further signs of a cooling economy.
With economic growth remaining weak, analysts say the latest figures strengthen the case for a 25-basis-point rate cut to 3.75%. Chancellor Rachel Reeves welcomed the easing in inflation but said that cost-of-living pressures remain a concern for many households.
