BOE’s Bailey: Disinflation has taken place faster than expected in the UK and elsewhere

The market has certainly noticed the slowing inflation with the pound down 65 pips today to the lowest since mid-August.

The market is 95% priced for a 25 bps cut in November but only about 75% priced for another cut in December. That’s too low.

• Inflation below target pushed around by annual base effects
• High savings rate reflects consumer caution
• Pensions funds should not have to make compulsory allocations to UK assets

This article was written by Adam Button at www.forexlive.com.