The prevailing consensus that interest rates will remain higher for longer looks like cracking as inflation reduces much faster than forecast
For pension folk , this means that the current annuity rates and bulk annuity pricing are unlikely to last.
For UK pension schemes , the moment of reckoning is coming.
Inflation falls – a Christmas present ?
UK inflation slowed far more than expected in November to 3.9 per cent, down from 4.6 per cent the previous month, fuelling hopes of cuts to interest rates next year.
The year-on-year rise in the consumer prices index was far lower than the 4.4 per cent predicted by economists polled by Reuters, with food and fuel prices pulling it down according to the Office for National Statistics. Core inflation, which strips out volatile food and energy prices, stood at 5.1 per cent in the 12 months to November, compared with 5.7 per cent the previous month, also a bigger fall than expected.