UK official data shows that the November CPI year-on-year dropped to 3.2%, with inflation cooling more than market expectations and getting closer to the Bank of England's 2% target. The probability of a rate cut before Christmas has increased, attracting attention from global financial markets.

This inflation decline is attributed to easing energy price fluctuations, stabilization of core goods retail prices, and cooling of service sector inflation, creating conditions for monetary policy easing.

The Bank of England will hold its final monetary policy meeting this Thursday. The November inflation data has shifted market expectations towards a “rate cut,” with many institutions believing the bank may announce a cut accordingly.

The rising expectations of a rate cut have led to positive reactions in the UK financial markets, with GBP exchange rate fluctuations, increased stock market activity, and adjustments in bond yields. A rate cut would ease household debt burdens, boost consumer demand, and reduce corporate financing costs.

However, the market still needs to pay attention to the bank’s final stance, and subsequent developments will be closely monitored.