Economists expect the Bank of England to cut interest rates to 3.75% from 4% this Thursday, following a drop in inflation to an eight-month low.

November’s Consumer Prices Index fell to 3.2% from 3.6% in October, driven by easing food, drink, alcohol, and tobacco prices.

The rate cut would mark the lowest borrowing cost since February 2023 and is seen as a response to cooling price pressures and broader signs of a slowing economy, including rising unemployment and stagnant growth.

Analysts predict this may be followed by one or two additional cuts in early 2025, though rates are unlikely to return to the ultra-low levels seen previously, the Independent has reported.

Despite the decline, inflation remains above the Bank’s 2% target, leaving uncertainty about economic conditions in the year ahead.