Sanitation: UK inflation final hurdle before BoE verdict

Morning Bid Europe

A look at the day ahead in European and global markets

By Rae Wee, Asia Markets Correspondent

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All eyes in the European session will be on British inflation figures due early on Wednesday, just a day ahead of the Bank of England's rate outcome which is likely to come down to a knife-edge vote.

Expectations are for the headline and core consumer prices to have slowed on a monthly basis, which would give policymakers further comfort to lower rates on Thursday.

Today's Market News

Inflation and job market headaches

A portrait of Britain's King Charles is displayed on a British five pound note in this illustration taken in Manchester, Britain, November 25, 2025. REUTERS/Phil Noble/Illustration

In October, the headline inflation rate eased to an annual 3.6% - still a long way above the BoE's 2% target but its first fall since May.

But with Britain's inflation rate still the highest among the Group of Seven economies, that has kept policymakers divided on whether job losses or inflation pressures pose the biggest risk to the economy.

Data on Tuesday showed Britain's unemployment rate hit its highest since the start of 2021 and private sector pay growth was the weakest in nearly five years in the three months to October.

Still, with markets convinced the BoE will cut this week, any major surprise in Wednesday's inflation print is more likely to influence policymakers' guidance on the future rate outlook.

Investors will be scrutinising the data for hints on whether another cut could be on the cards, and when it might come.

Venezuela blockade

Elsewhere, oil prices jumped on Wednesday after U.S. President Donald Trump ordered "a total and complete" blockade of all sanctioned oil tankers entering and leaving Venezuela, raising fresh geopolitical tensions at a time of concerns over demand.

The move marks Washington's latest step to increase pressure on Nicolas Maduro's government, targeting its main source of income.

In the broader market, stocks were adrift as a long-awaited U.S. jobs report passed with little impact, with focus now on rate decisions from the BoE as well as the European Central Bank and the Bank of Japan later in the week, alongside a reading on U.S. inflation.

Over in China, it was a tale of diverging fortunes, as shares of AI chipmaker MetaX Integrated Circuits soared 700% in their market debut, with investors eager to capitalise on a government push to reduce reliance on AI chips from U.S. majors.

Meanwhile, property developer China Vanke is seeking to extend the grace period for a 2 billion yuan ($283.6 million) bond payment to 30 trading days from the current five, underscoring the persistent headwinds facing the nation's ailing property sector.

Graphics are produced by Reuters.

Key developments that could influence markets on Wednesday:

UK inflation (November)
Fed's Waller, Williams, Bostic speak

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