Unexpected fall last month should help ease fears inside Treasury and Bank of England after bond market sell-off

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December’s unexpected decline in the inflation rate, to 2.5%, is a fillip for the chancellor, Rachel Reeves, opening the way for an interest rate cut next month.

While much of the bond market sell-off in recent days has been driven by global concerns, part of it related to fears that the UK was sliding towards “stagflation” – a nasty combination of slow growth and sticky prices.