New pressure to cut interest rates as UK economy falters and US inflation dips

Commuters near Tower Bridge in London. An economy is considered to be in a technical recession after two consecutive quarters of contraction in GDP. Photograph: Victoria Jones/PA

Central banks on both sides of the Atlantic have come under renewed pressure to cut interest rates early in the new year after official figures showed an increasing likelihood of a recession in the UK and a drop in inflation in the US.

Analysts said the US Federal Reserve would struggle to resist calls for lower interest rates in the first half of 2024 after the central bank’s preferred measure of inflation fell to 3.2% in November from 3.4% in the previous month.