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I confirm my intention to proceed and enter this websiteThe United Kingdom’s annual consumer price inflation eased to 1.7% in September, down from 2.2% in August, marking the lowest reading since April 2021. This decline, attributed to lower airfares and petrol prices, was reported by the Office for National Statistics. The figure came in below economists’ expectations of 1.9%.
(UK Inflation Data, Source: Office for National Statistics)
In addition, private sector pay growth slowed to 4.8% in the three months leading up to August, aligning with the Bank of England’s forecast of a 4.8% increase for the third quarter. Further indicating a cooling labor market, the number of estimated vacancies in the UK dropped by 34,000 to 841,000 in the three months ending in September, a level comparable to pre-pandemic conditions. The unemployment rate also fell to 4.0% during the three months to August, the lowest level this year, accompanied by a record surge in employment.
As a result, this series of economic data has heightened expectations of a rate cut by the Bank of England. Interest rate futures now suggest a 90% likelihood of two quarter-point rate cuts by the BoE before year-end, up from an 80% chance earlier in the week. This inflation report removes a key obstacle for the Monetary Policy Committee to vote for a 25bps rate cut at its November meeting.
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