Bank of England sees budget cutting inflation by around 0.4-0.5 percentage points

LONDON, ‌Dec 9 (Reuters) - The Bank ‍of ‌England estimates that finance minister Rachel ⁠Reeves' budget ‌announced last month will knock off around 0.4 to 0.5 ⁠percentage points from the annual rate ​of inflation from around midway ‌through next ⁠year, a top official said on Tuesday.

"We think it ​will reduce inflation by between 0.4 and 0.5 percent for a year from the ​second ‍quarter of ​2026," Deputy Governor Clare Lombardelli told lawmakers from parliament's Treasury Committee, citing an early analysis from BoE staff.

The Office ⁠for Budget Responsibility had previously estimated a 0.4 ​percentage point reduction to inflation over the 2026/27 financial year as a ‌result of budget policies.

(Reporting by Andy Bruce and David Milliken)