Confidence in second BoE rate cut soars as inflation falls below 2% for first time since 2021

But volatility remains

UK inflation fell below the Bank of England’s 2% target for the first time in three years in the 12 months to September, according to data from the Office for National Statistics (ONS).

The Consumer Prices Index (CPI) fell to 1.7% in September, down from 2.2% in August. Inflation had reached the central bank's 2% target at the beginning of the summer, only for it to edge slightly above in the following months. According to the ONS data today (16 October), the largest detraction came from transport, especially from air fares and motor fuels, offsetting the larger contribution from food and non-alcoholic beverages. Yet core CPI remained elevated at 3.2%, although down from 3.6% in August, with CPI goods falling from -0.9% to -1.4% and services inflation from 5.6% to 4....