Consumer price growth eased in the UK last month, reducing pressure on households and increasing the chances the Bank of England will lower interest rates at its final meeting of the year next month.

Headline inflation slipped to 3.6% y/y last month versus 3.8% in September, but the decline fell short of the 3.5% forecast by economists. The fall was driven in part by smaller hikes in gas and electricity prices and lower accommodation costs.

Core consumer price growth decreased in line with forecasts to 3.4% compared to 3.5% in September. Services inflation eased to 4.5%.

Following this month’s rate hold, which was decided by a single vote, BoE officials predicted that annual headline inflation had likely peaked at 3.8%, where it held from July to September. Others agreed. Matt Swannell, chief economic advisor to the EY ITEM Club, said:” Inflation has now passed its peak. Headline inflation is expected to remain at similar levels over the final months of this year before drifting downwards through next year.” (LiveSquawk – Continue Reading)

Fitch Ratings’ ‘neutral’ 2026 sector outlook for global sovereigns reflects expectation of broadly flat world GDP growth, reduced uncertainty over US tariffs and lower policy rates. However, material risks emanate from structural shifts in trade, technology, geopolitics and financial markets, while public finances are increasingly stretched in several major economies.

We expect broadly flat global GDP growth, but risks to this include renewed trade war, a deepening downturn in China, a reappraisal of returns on AI investments, US overheating and financial market shocks. Greater clarity on US tariff policy has now emerged after a flurry of announcements and deals but much of the impact is yet to bite. There is also likely to be further volatility in 2026 – albeit in a narrower range than in 2025 – given the US’s approach, legal challenges, US-China competition and the scheduled review of the USMCA. (Fitch – Continue Reading)

The European Central Bank will hold interest rates at least until the end of 2026, according to a majority of economists polled by Reuters, who also expected the euro zone economy to grow steadily with contained inflation despite a highly-uncertain global outlook.

The case for a longer pause has strengthened since the ECB last cut rates in June, with inflation remaining persistently around the 2% target, growth stable and unemployment at a record low. (Reuters – Continue Reading)