The Pound eased on Wednesday as data revealed UK inflation cooled more than forecast in October, reinforcing forecasts the Bank of England (BoE) will slash interest rates by the middle of 2024.

The UK consumer price index (CPI) increased by 4.6% in the 12 months to October from the 6.7% rise in September, as per the Office for National Statistics.

This was the lowest reading in two years and falling short of forecasts for a 4.8% figure.

At the time of writing, Sterling edged down 0.2% to $1.2471 compared to $1.2487 just before the data was published.

The Euro rose 0.1% against Sterling at 87.135 pence.

Furthermore, core inflation – not taking into account food and energy prices – also rose less than forecast, a 5.7% rise compared to 6.1% in September and below forecasts for a 5.8% reading.

"This is a large fall in the headline CPI, but was widely anticipated due to year-on-year effects and falling energy prices; nevertheless, it is good news which confirms the downward trend in inflation," said Richard Garland, chief investment strategist at Omnis Investments.

"It is likely to mean that the bank is in a good position to begin cutting rates in late 2024, but much depends on the strength of the labour market and the economy," he added.

Inflation has been on a downward trajectory since last October's 40-year high of 11%, but remains above the Bank of England's target rate of 2%.

The UK government promised this year to halve inflation by the end of this year, without setting an exact target level. Whereas on Wednesday the ministry of finance said it had met that goal.

"In January we said we'd halve inflation. Today we've done that - inflation is now 4.6%," according to the government's Treasury department.

Meanwhile, the Pound reached a two-month high the day before, when it registered its largest one-day rise against the greenback in a year, following US data revealing the smallest annual rise in underlying consumer inflation in two years.