Finance
Morning Bid: UK inflation final hurdle before BoE verdict
Published by Global Banking and Finance Review
Posted on December 17, 2025
3 min readLast updated: January 20, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on December 17, 2025
3 min readLast updated: January 20, 2026
UK inflation figures are pivotal ahead of the BoE's rate decision, with potential implications for future economic policy.
A look at the day ahead in European and global markets from Rae Wee
All eyes in the European session will be on British inflation figures due early on Wednesday, just a day ahead of the Bank of England's rate outcome which is likely to come down to a knife-edge vote.
Expectations are for the headline and core consumer prices to have slowed on a monthly basis, which would give policymakers further comfort to lower rates on Thursday.
In October, the headline inflation rate eased to an annual 3.6% - still a long way above the BoE's 2% target but its first fall since May.
But with Britain's inflation rate still the highest among the Group of Seven economies, that has kept policymakers divided on whether job losses or inflation pressures pose the biggest risk to the economy.
Data on Tuesday showed Britain's unemployment rate hit its highest since the start of 2021 and private sector pay growth was the weakest in nearly five years in the three months to October.
Still, with markets convinced the BoE will cut this week, any major surprise in Wednesday's inflation print is more likely to influence policymakers' guidance on the future rate outlook.
Investors will be scrutinising the data for hints on whether another cut could be on the cards, and when it might come.
Elsewhere, oil prices jumped on Wednesday after U.S. President Donald Trump ordered "a total and complete" blockade of all sanctioned oil tankers entering and leaving Venezuela, raising fresh geopolitical tensions at a time of concerns over demand.
The move marks Washington's latest step to increase pressure on Nicolas Maduro's government, targeting its main source of income.
In the broader market, stocks were adrift as a long-awaited U.S. jobs report passed with little impact, with focus now on rate decisions from the BoE as well as the European Central Bank and the Bank of Japan later in the week, alongside a reading on U.S. inflation.
Over in China, it was a tale of diverging fortunes, as shares of AI chipmaker MetaX Integrated Circuits soared 700% in their market debut, with investors eager to capitalise on a government push to reduce reliance on AI chips from U.S. majors.
Meanwhile, property developer China Vanke is seeking to extend the grace period for a 2 billion yuan ($283.6 million) bond payment to 30 trading days from the current five, underscoring the persistent headwinds facing the nation's ailing property sector.
Key developments that could influence markets on Wednesday:
- UK inflation (November)
- Fed's Waller, Williams, Bostic speak
(Editing by Jamie Freed)
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. Central banks attempt to limit inflation to keep the economy stable.
Monetary policy refers to the actions taken by a country's central bank to control the money supply and interest rates to achieve macroeconomic objectives such as controlling inflation and stabilizing currency.
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