Drop in November annual rate adds to case for Bank of England cut to interest rates on Thursday

• Analysis: Inflation drop makes Bank of England early Christmas present to Reeves almost a certainty

• Business live – latest updates

UK inflation fell by more than expected in November to the lowest level in eight months amid a slowdown in food prices, clearing the way for the Bank of England to cut interest rates on Thursday.

In a crunch week for the economy, the Office for National Statistics said the rate as measured by the consumer prices index eased to 3.2% last month from a reading of 3.6% in October. City economists had forecast a modest drop to 3.5%.

Reflecting on chaos of early pandemic, former chancellor said it was ‘acutely stressful’ to see rising interest bill on government bonds

Rishi Sunak was concerned about the UK’s ability to fund itself in March 2020 after the government announced rescue measures costing tens of billions of pounds to prevent mass redundancies, the Covid-19 pandemic inquiry has heard.

The former prime minister, who was chancellor when the first UK lockdown was announced, said he feared foreign investors had become more concerned about Britain’s ability to pay its way than other countries in a similar situation.

The City expects a cut in interest rates on Thursday but the economic prospects for 2026 complicate the picture

In the economic gloom of Labour’s first year in power, Rachel Reeves has had a reliable shred of comfort to cling to: five times since the general election, the Bank of England has cut interest rates.

This week, in all likelihood, the chancellor will get a sixth to shout about, as Threadneedle Street prepares to reduce borrowing costs in an early Christmas present that will be seized upon by the Treasury.

GDP fell by 0.1% in October as activity failed to regain momentum after cyber-attack on Jaguar Land Rover

• Business live – latest updates

Britain’s economy shrank unexpectedly in October as consumers held back on spending before Rachel Reeves’s budget, and car manufacturing struggled to recover from the cyber-attack on Jaguar Land Rover.

Figures from the Office for National Statistics (ONS) showed gross domestic product fell by 0.1%, after a 0.1% drop in output in September. City economists had predicted a 0.1% rise in October.

In a boost for Rachel Reeves, deputy governor says analysis shows chancellor’s policies will lower annual rate next year

The Bank of England expects Rachel Reeves’s budget will reduce the UK’s headline inflation rate by as much as half a percentage point next year.

In a boost for the chancellor after last month’s high-stakes tax and spending statement, Clare Lombardelli, a deputy governor at the central bank, said its early analysis showed the policies would lower the annual inflation rate by 0.4 to 0.5 percentage points for a year from mid-2026.