UK inflation falls far more than expected, lowest since Sept 2021

Meanwhile, Germany’s 10-year yield fell below 2% for the first time in nine months, as worsening eurozone economic data and slowing inflation underscore the need for interest-rate cuts next year.

Benchmark borrowing costs fell four basis points to 1.98%, after the data showed inflation in the UK eased, bolstering European bonds.

British inflation fell by more than any economist polled by Reuters predicted in November, pushing the headline rate to its lowest since September 2021, according to data that will further fuel bets on Bank of England interest rate cuts next year.

The annual rate of consumer price increases fell to 3.9% from 4.6% in October, the Office for National Statistics said, while closely-watched core and services measures of inflation also fell.