UNIONS called for the Bank of England to implement a “sequence of rate cuts” today after inflation fell more sharply than expected, hitting an eight-month low.

Figures from the Office for National Statistics (ONS) revealed that rates of inflation across Britain had dropped to 3.2 per cent, when 3.5 per cent had been forecast.

The TUC responded to the unexpected fall, saying Britain’s central bank should reduce interest rates when policymakers hold their next meeting on Thursday.

“Inflation may be falling, but many working people are still struggling to afford the basics,” TUC general secretary Paul Nowak said.

“The government acted to protect living standards and push back against inflation in last month’s Budget, but more must be done. 

“The economy is fragile and high interest rates are draining confidence from households and firms. It’s vital that we now boost demand.”

To do so, Mr Nowak said the government’s monetary authority should start a series of rate cuts this week.

He said: “The Bank of England has been too cautious this year and inflation is already lower than they expected only last month.

“So an interest rate cut this week must be the start of a sequence of reductions over the months ahead. 

“It’s long overdue and it’s the shot in the arm that the economy needs. 

“Lower rates will give firms the confidence to invest and help get more households spending.”

November’s lower inflation reading marked a slowdown from October’s 3.6 per cent, due to a drop in food, drink and clothing prices, the ONS said.

Bank of England governor Andrew Bailey has signalled support for a further quarter-point rate reduction to 3.75 per cent at this week’s meeting of the Monetary Policy Committee.

It follows recent figures showing that Britain’s unemployment rate rose to 5.1 per cent in the three months to October. The economy also contracted by 0.1 per cent last month.

The reserve bank says Chancellor Rachel Reeves’s November Budget will bring headline inflation down by about 0.4 to 0.5 percentage points due to cost-of-living policies aimed at cutting the cost of energy for households.

Ms Reeves responded to the figures by saying: “I know families across Britain who are worried about bills will welcome this fall in inflation.”