UK inflation fall spurs rate cut expectations

UK inflation has fallen to its lowest level since April 2021, at 1.7% in September. This marks a decrease from the 2.2% noted in August and is seen as positive news for British consumers, according to Kim Blindbæk of Sydbank. Although this doesn’t necessarily mean prices are dropping, the rate of price increases has slowed. Blindbæk anticipates the Bank of England will cut interest rates further in the near future, potentially reducing them by 0.25 percentage points at the next meeting. Previously, the Bank had raised rates from 0.1% to 5.25% over 18 months to counteract rising energy prices. Current inflation levels are around the 2% target. Allan Sørensen from Dansk Industri also suggests that a rate cut could stimulate the British economy, which would benefit Danish exports to the UK, Denmark’s fourth-largest export market.