UK inflation significantly cooled in November to 3.2%, official figures show, strengthening the case for the Bank of England to cut interest rates on Thursday.

In a crunch week for the economy, the Office for National Statistics said the annual inflation rate as measured by the consumer prices index eased last month from a reading of 3.6% in October, overshooting City forecasts of a modest drop to 3.5%.

Threadneedle Street is expected to cut its base rate on Thursday amid weaker economic growth, rising unemployment and easing inflationary pressures. Financial markets predicted a 90% probability of a quarter-point reduction before the release of the latest inflation snapshot.

The chancellor, Rachel Reeves, made tackling the cost of living a major target of last month’s autumn budget, alongside £26bn of tax increases to help repair the public finances and fund the end of the two-child benefit cap.

The Bank has said it expects the chancellor’s measures – including relief on energy bills, prescription charges and fuel duty – could cut headline inflation by as much as half a percentage point next year.

However, figures last week showed the economy unexpectedly shrank in October as consumers held back on spending amid intense pre-budget speculation over tax changes and car manufacturing struggled to recover from a cyber-attack on Jaguar Land Rover.

More details soon …