CPI Slides 2%In reassuring news for both UK households and the BOE, UK inflation was seen cooling sharply last month. Headline annualised inflation fell back to 4.6% from 6.7% prior, below the 4.7% the market was looking for. This marked the largest deflationary move in two-years in the UK. Core inflation was seen falling too, printing 5.7% on the month, down from 6.1% prior and a touch below the 5.8% the market was looking for. Energy Prices PlungeLooking at the breakdown of the data, the reduction in UK energy regulator Ofgem’s price cap played a big part in driving inflation lower last month. Overall, the cost of households and utilities was down 3.5% from the 6.9% seen over the prior month. The drop in energy prices was the largest monthly reduction since January 1989.  Services inflation, a gauge closely watched by the BOE, was also seen falling to 6.6% from 6.9% prior. BOE Rates Outlook ChangesAt the last BOE meeting, governor Bailey was keen to warn that the bank was not necessarily done with tightening and would act further as needed. However, on the back of this data, traders now sense that the BOE tightening cycle is in fact complete and market pricing is already beginning to focus on projecting the first anticipated BOE rate cuts in H1 2024. In light of this shift, GBP looks vulnerable to downside through the year end despite the USD-fuelled rally we saw yesterday. Technical Views GBPAUDThe rally in risk assets is driving GBP lower against AUD today. The pair recently failed at the latest test of the 1.933 level and is now turning lower. With momentum readings weakening, the focus is on a deeper rotation lower and a test of the 1.8980 range lows. A break lower there will turn focus to 1.86 thereafter. More By This Author:Crude Oil CommentaryU.S. Market Commentary – Tuesday, November 14U.K. Economic Commentary