Today's inflation figures and yesterday's wage growth data have already raised hopes that the Bank of England will cut its benchmark interest rate further this year.
Britain's inflation rate unexpectedly fell to 1.7% in the year to September, its lowest level in three-and-a-half years, comfortably below the central bank's 2% target. 
Importantly, services inflation fell to 4.9% from 5.6% in August.
The Office for National Statistics said the figures come a day after salaries (excluding bonuses) grew by 4.9% in the three months to August, down from 5.1% in the quarter to July.
The central bank's interest rate-setting Monetary Policy Committee has long said it wants to see wage growth and service inflation below 5% before considering a period of continued reductions in the benchmark interest rate from the same 5% level. Ta.
But so far this year, wages and service prices have remained stubbornly above 5%.
The combined numbers sent shockwaves through money markets.
Traders are betting the Bank of England will cut interest rates in November, and are also increasing bets on a second rate cut before the end of the year as inflation plummets.
Money market forecasts suggest a 76% chance of a second cut in borrowing costs in December, up from 48% on Tuesday.
This would mean two 0.25% rate cuts by the end of the year, potentially lowering the base interest rate from 5% to 4.5%.
“Today's inflation numbers should be music to the ears of the monetary policy committee,” said Sanjay Raja, chief UK economist at Deutsche Bank. The pace of inflation is slowing.
“Prices for services in the UK, once thought to remain high, are falling faster than expected, raising the possibility of a gradual rate cut.”
Quilter mortgage expert Karen Noy said: “Mortgage rates have fallen from their recent highs and this morning's inflation figures are encouraging for prospective buyers and those looking to refinance that the Bank of England has “This gives us a glimmer of hope that monetary policy will continue to lower interest rates next time,” he added. Policy meeting.
“Many financial institutions are currently offering deals with interest rates around 4%, and we expect these rates to start to fall gradually if the central bank continues its rate-cutting path.
“Lower mortgage rates should make financing options more affordable for potential buyers, increasing buyer confidence and further energizing the market.”
But other economists say the Bank of England's position is not as rosy as it seems.
BNP Paribas said the decline in headline inflation was mainly due to “short-term wins” related to global factors such as easing energy prices and normalizing supply chains, while services inflation remained weak. It is claimed that there is.
The French bank said in a note to customers: If “UK inflation fell more than expected to below 2% in September, increasing the likelihood that the Bank of England will cut interest rates by 0.25% in November, in line with our criteria.” “
However, it added: “Thus, while the developments in inflation support continued easing, we do not think it is enough to persuade the Monetary Policy Committee to move in a more 'aggressive' direction.”
Mr Nomura was more specific, saying the Bank of England may only be able to cut interest rates once before the end of the year.
The Japanese bank noted that “weakness in services inflation was primarily due to airfares, a factor often studied by the Bank of England.''
“While the Bank of England will be relieved by today's numbers, it still cannot claim victory over services inflation.
“Challenges remain, suggesting that cuts can only be made once a quarter.”
The Monetary Policy Committee will meet two more times this year, on November 7th and December 19th. Every time, traders, lenders, brokers and mortgage borrowers nervously watch the midday announcement time.
