The FTSE 100 rallied strongly yesterday morning sparked by yesterday’s surprisingly soft inflation report. UK inflation fell sharply to 3.2% in November (down from 3.6% in October), coming in well below the 3.5% that economists had predicted. The market now views an interest rate cut at today’s BoE meeting as a near certainty. The UK interest rate decision is expected at 12:00. The S&P 500 declined sharply but today it is stable ahead of the US CPI data expected at 1.30pm. Investors are watching to see if inflation holds steady or ticks up toward the predicted 3.1%, which could derail hopes for a “Santa Rally” or further interest rate cuts in early 2026. Hotter-than-expected readings might pressure stocks, especially growth and tech sectors, while cooler data could support a rebound.