LONDON, Nov 15 Reuters Sterling eased on Wednesday after data showed British inflation cooled more than forecast in October, reinforcing expectations that the Bank of England BoE will be cutting interest rates by the middle of next year.

The British consumer price index CPI rose by 4.6 in the 12 months to October, from September39;s 6.7 increase, according to the Office for National Statistics.

It was the lowest reading in two years and below forecasts for a reading of 4.8.

Sterling was last down 0.2 on the day at 1.2471 by 0724 GMT, compared with 1.2487 shortly before the data.

The euro was up 0.1 against the pound at 87.135 pence.

Core inflation, which strips out food and energy prices, also rose less than expected, up 5.7 compared with 6.1 in September, and below estimates for a reading of 5.8.

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

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 path since last October39;s fourdecade high of 11, but it has proven more stubborn in Britain than elsewhere and is still well above the BoE39;s target rate of 2.

The government of…