U.K. inflation continued its downward trend in October, with annual headline CPI slowing to 3.6% from 3.8% in September, matching economist forecasts. The deceleration strengthens the case for the Bank of England to consider interest rate cuts as early as December, according to Richard Flax of Moneyfarm.

The inflation data comes ahead of the closely watched U.K. budget announcement scheduled for November 26, which is expected to significantly influence the country's macroeconomic outlook and provide further direction for monetary policy.

Market attention now turns to how these cooling price pressures will factor into the Bank of England's December policy decision, with many analysts anticipating a shift toward easier monetary policy.