Deutsche Bank Sees A Clearer Path to A Bank of England Rate Cut After October's Inflation Data

07:29 AM EST, 11/19/2025 (MT Newswires) -- The United Kingdom's October consumer price index ended up being less exciting than Deutsche Bank thought it could be.

Headline CPI printed slightly above consensus and Bank of England expectations, at 3.6% y/y, supported by still sticky and elevated food price momentum, noted Sanjay Raja, Deutsche Bank's chief U.K. economist.

The good news is that services inflation slipped to 4.5% year over year, with weaker-than-expected travel fares, tuition fees and accommodation prices all pulling services price momentum a touch lower than market expectations, he pointed out.

Deutsche Bank's suite of core services measures, which strips out some of the more volatile and erratic items in the basket, was also broadly positive -- highlighting continued disinflation in the economy, according to Raja.

The BoE's Monetary Policy Committee now has a clearer path for a Christmas rate cut, accoridng to Deutsche Bank. With the labor market softening more than expected, gross domestic product growth weaker than the BoE projected, and underlying inflation tracking a little lower than BoE expectations, Raja thinks Governor Andrew Bailey -- who will likely have the deciding vote for December -- will feel more confident about cutting Bank Rate below 4%.

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