UK interest rates expected to fall sharply next year as inflation drops to 3.9%

Forecast-beating drop in November takes rate to lowest level in more than two years

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The City is expecting interest rates to fall sharply next year following news of a much bigger than expected fall in the UK's annual inflation rate to 3.9% in November.

Despite the Bank of England's insistence it is too early to contemplate reducing the cost of borrowing, the markets believe Threadneedle Street will deliver at least four interest rate cuts during 2024.