UK Inflation Dips, Fueling Interest Rate Cut Speculations

The unexpected drop in inflation to 1.7% raises prospects of consecutive interest rate cuts by the Bank of England, though mortgage rates remain high.

• UK inflation fell to 1.7% in September, its lowest since April 2021, increasing the likelihood of interest rate cuts by the Bank of England.
• Despite the inflation drop, mortgage rates have slightly increased, with lenders awaiting the upcoming Budget for clearer direction.
• The Bank of England's Monetary Policy Committee is expected to consider further rate cuts, with economists anticipating a potential cut in November.
• The drop in inflation was driven by decreases in fuel and air travel costs, though food prices saw a slight increase.
• Mortgage holders face rising costs as fixed-rate deals expire, despite the broader trend of falling inflation.

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