The U.K.’s annual rate of inflation fell more sharply than expected in October as household energy prices tumbled, the latest sign that a two-year surge in consumer prices across Europe is running out of steam as the continent’s economy flatlines.
News of that decline followed Tuesday’s report of a drop in the U.S. inflation rate and added to investor confidence that the leading central banks are done raising their key interest rates—and are likely to start paring back lending rates in 2024, helping the economy. In the U.S., the inflation rate fell to 3.2% in October from 3.7% in September.
With Europe’s economies on the brink of recession, most economists expect inflation to continue to fall over the coming months. But central bankers remain wary, pointing to the still-rapid rise in wages and the risk of a fresh pickup in energy prices if the conflict between Israel and Hamas spills over into other parts of the Middle East.
Read the full story here.