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LONDON, Dec 16 (Reuters) - British inflation slowed less than expected in November, official data showed on Tuesday, but is still forecast to fall sharply soon because of a cut in sales tax and tumbling fuel prices.
The Office for National Statistics said consumer prices fell 0.1 percent last month to bring the annual rate down to 4.1 percent from 4.5 percent in October.
That was the lowest rate since June but still more than double the Bank of England's 2.0 percent target and above forecasts for a reading of 3.9 percent.
It means the Bank of England will have to write a letter to finance minister Alistair Darling explaining why CPI inflation has held more than one percentage point above the target.
However, policymakers including Darling are convinced inflation is no longer a threat and recession poses the far greater danger.
As such, the data are unlikely to alter expectations of further aggressive interest rate cuts in the coming months.
"The CPI figures are little firmer than expected. The main reason seemingly being another sharp increase in food prices on the month," said Philip Shaw, economist at Investec.
"Nevertheless, the UK is still in the very early stages of what is going to be a very steep decline in inflation that will see both the CPI and RPI in negative territory for much of 2009.
"Our forecast remains that the UK bank rate will fall below 1.0 percent in the second quarter of next year."
The BoE has already slashed rates by three full points to 2.0 percent since October.
Gilts strengthened after the data and stocks also rose.
The ONS said the biggest downward effect on CPI came from transport costs which knocked 0.45 percentage points off the annual rate as fuel prices fell sharply.
The main upward effect came from food prices as fruit inflation doubled to 10.8 percent.
The ONS said retail price inflation, on which many wage deals are based, fell to 3.0 percent -- the weakest rate since May 2006. (Editing by Mike Peacock)