Inflation cooled slightly to 2.5% in December, adding to the likelihood the Bank of England will move to cut interest rates against a difficult economic backdrop.

Inflation in the U.K. unexpectedly fell in December, a move that will likely fuel pressure on the Bank of England to cut interest rates again next month

Federal Reserve policymakers may be able to reduce interest rates a couple of times this year, traders bet on Wednesday, after a government report helped allay fears that inflation was accelerating in the final full month of Joe Biden's presidency.

On Wednesday the Labor Department is expected to report that in December the consumer price index rose 2.8 percent from a year ago, according to economists surveyed by FactSet, up from a 2.7 percent yearly increase in November.