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2025-12-17 15:59:39
[British Inflation Falls Short of Expectations, Pound Weakens] ⑴ The pound fell sharply against the dollar to around 1.33 after UK inflation data fell significantly short of expectations, reinforcing market expectations that the Bank of England would cut interest rates on Thursday. ⑵ The annual inflation rate slowed to 3.2% in November, below the market expectation of 3.5% and the Bank of England's own forecast of 3.4%. Earlier this week, labor market data showed the unemployment rate rose to its highest level since 2021, while wage growth slowed, although the decline was less than expected. ⑶ Meanwhile, GDP data released last week showed the UK economy contracted for the second consecutive month in October. ⑷ Against this backdrop, the market widely expects the Bank of England to resume its easing cycle, cutting the benchmark interest rate by 25 basis points to 3.75%, which would be the lowest level since 2022. The Bank of England had previously kept interest rates unchanged in September and November. ⑸ Current market pricing indicates a cumulative interest rate cut of approximately 66 basis points by 2026, compared to an expectation of 58 basis points before the release of the Consumer Price Index.
