UK inflation dropped more than expected on Wednesday which will come as a welcome surprise to market participants and UK citizens. Core inflation which excludes volatile components like food and energy fell to 6.7% from 6.8% in July and certainly in contrast to what investors were predicting for August which was a rise up to 7%. This positive move back towards the central banks 2% target is welcome and should prompt the Bank of England on Thursday to hold rates steady at 5.25% rather than raising rates again to 5.5%