UK inflation at lowest since late 2016, stokes rate cut talk

Official figures show that inflation in Britain has fallen to its lowest level since late 2016

LONDON -- Inflation in Britain has fallen to its lowest level since late 2016, official figures showed Wednesday, in a development that is likely to heighten expectations that the Bank of England will cut interest rates later this month.

The Office for National Statistics said consumer prices rose by 1.3% in the year to December, down from 1.5% the previous month. The consensus in financial markets was that there would be no change in the rate.

The statistics agency said the main downward pressure on inflation came from accommodation services and clothing.

Following the release of the inflation figures, the pound dropped slightly to below $1.30.