In a major development that has implications for the UK economy, the Bank of England's interest rate forecasts have been revised downwards following the announcement of a steeper-than-expected drop in inflation figures.
The latest UK inflation data, which shows a fall from 8.7% in May to 7.9% in June, has led experts to revise their predictions for peak interest rates from 6% to 5.75%.
The drop in inflation figures comes as a surprise, as many analysts had predicted a smaller decline.
The news is likely to be welcomed by consumers, who have been feeling the pinch from rising living costs in recent months.
However, it also raises questions about the state of the UK economy, and whether the Bank of England's monetary policy has been effective in controlling inflation.
Sky News' Ed Conway, a respected financial journalist, has explained the unexpected drop in inflation figures, noting that it is not clear why inflation has fallen so sharply.
He points out that the Bank of England had previously signaled its intention to raise interest rates to curb inflation, but the latest figures suggest that this may no longer be necessary.
The revised interest rate forecasts are likely to have a significant impact on the UK economy, affecting everything from mortgage rates to consumer spending.
With the country still recovering from the economic fallout of the COVID
-19 pandemic, any changes to interest rates can have a major impact on businesses and individuals.
Overall, the unexpected drop in inflation figures represents a significant development in the UK economy, and is likely to be closely watched by experts and policymakers in the coming weeks and months.