UK Inflation Stalls at 3.8 Percent Putting Interest Rates Under Pressure

Inflation stood still at 3.8 percent, while both the central bank Bank of England and analysts had expected an increase to 4.0 percent.

The probability of a British interest rate cut before the turn of the year rose sharply after the figure, from around 30 to around 70 percent, in the pricing of the interest rate market.

At the same time, the interest rate on a two-year British government bond fell to 3.76 percent, from 3.85 percent. The ten-year interest rate also fell, though not as much.

The two-year interest rate is, with Wednesday's fall, down to the lowest level since before the pandemic.

The pound fell against other global currencies.