The Canary Wharf business district is visible in the distance behind autumn leaves on October 9, 2024 in London, England.
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LONDON – Britain’s inflation rate fell sharply to 1.7% in September, the Office for National Statistics said on Wednesday.
Economists polled by Reuters had expected headline interest rates to rise to 1.9% this month, below the Bank of England’s 2% target for the first time since April 2021.
Inflation has hovered around this level for the past four months, with inflation at 2.2% in August.
Core inflation (excluding energy, food, alcohol and tobacco) was 3.2% this month, down from 3.6% in August and below the 3.4% forecast in a Reuters poll.
Price growth in the services sector, the leading part of the British economy, slowed sharply from 5.6% in August to 4.9% last month and is now at its lowest level since May 2022.
Core inflation and services inflation are key observations for Bank of England policymakers as they consider whether to cut interest rates again at their November meeting.
As of Wednesday morning, markets were pricing in an 80% chance of a rate cut in November ahead of the latest inflation data. analysts said on tuesday Wage growth slows This week’s report from the Office for National Statistics backs up the case for cuts. The Bank of England cut its key interest rate by 25 basis points in August and kept it unchanged in September.
In wider Europe, euro zone inflation fell below the European Central Bank’s 2% target last month, reaching 1.8%, the latest data showed.
This is a breaking news story and will be updated soon.
