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London-listed stocks fell while government bonds rose on Wednesday as inflation in the UK slowed slightly in November, helped by lower petrol prices.

Inflation in the UK eased last month from a 41-year high to 10.7% from 11.1% in October, according to data from the Office for National Statistics.

However, the market reaction was mixed, with London’s FTSE 100 down 0.3% in early trading. Energy and utilities performed best, while all other sectors were in negative territory.

Gilts performed better and rallied across the board. As bond prices rose, the two-year yield fell 0.06 percentage points to 3.44%, close to the level since late October. The 10-year yield fell 0.02 percentage points to 3.27%.

Meanwhile, the pound gained 0.15% against the dollar to $1.23. The currency, which has risen steadily against the dollar over the past two months, rose further after Tuesday’s data showed U.S. inflation eased in November.

The Bank of England, which is scheduled to meet on Thursday, is also expected to raise rates at a slower pace as the UK economy teeters on the brink of recession.

Francesco Pesole, FX strategist at ING, said he was not surprised by the pound’s “sluggish response” to inflation in November. Investors are nervous ahead of the Fed’s future economic forecasts, but his double-digit inflation rate in the UK suggests the BoE is likely to raise interest rates by half a percentage point later this week. I mean

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