The UK Consumer Price Index (CPI) rose by 2.5% year-on-year in December, down from 2.6% in November and below market expectations of 2.7%. Despite the slowdown, the figure remains above the Bank of England’s (BoE) 2% target.

The yield on 10-year UK bonds dropped to 4.73% after data revealed a further decline in UK inflation, bolstering investor expectations that the Bank of England (BoE) may cut interest rates.

Source: Fxstreet