U.K. Inflation Drops Sharply, Likely Ending Rate Hikes

LONDON—The U.K.’s annual rate of inflation fell more sharply than expected in October as household energy prices tumbled, the latest sign that a two-year surge in consumer prices across Europe is running out of steam as the continent’s economy flatlines.  

News of that decline followed Tuesday’s report of a drop in the U.S. inflation rate and added to investor confidence that the leading central banks are done raising their key interest rates—and are likely to start paring back lending rates in 2024, helping the economy. In the U.S., the inflation rate fell to 3.2% in October from 3.7% in September.