The British pound softened slightly after data showed UK inflation eased as expected in October, reinforcing market expectations for a Bank of England interest rate cut in December.

Annual headline inflation fell to 3.6% in October from 3.8% in September, while core inflation decelerated to 3.4% from 3.5%. The data prompted Schroders economist George Brown to note that "evidence inflation has peaked should tip the scales toward a December rate cut."

Market pricing now reflects a 79% probability of a December rate cut, according to LSEG data. Sterling traded at $1.3140 following the release, down modestly from $1.3150 beforehand. The euro also gained slightly against the pound, rising to 0.8817 from 0.8811.

Attention now turns to the UK budget announcement scheduled for November 26, which economists suggest will influence the pace of future monetary easing.