Inflation in the UK has cooled more than anticipated, dipping to 3.2% in November from 3.6%. The drop was helped by lower prices for food, alcohol, and clothing, marking the slowest pace in eight months.
The key driver of the decline was food prices, which fell notably for items like cakes, biscuits, and breakfast cereals, according to Grant Fitzner, the Office for National Statistics chief economist. This softening comes just ahead of Thursday’s Bank of England decision on interest rates, where a cut is widely anticipated.
The softer inflation reading raises hope that price increases may have peaked and could open the door to further rate reductions next year. Other contributors to the easing included cheaper tobacco, restaurant meals, hotel stays, furniture, and transport costs. While the overall price level still climbs on average, several categories showed price relief from October to November.
Food prices fell by 0.2 percentage points month-on-month, though they rose 4.2% year-on-year in November, a slower rise than the 4.9% year-over-year pace seen in October.
Chancellor Rachel Reeves welcomed the development, emphasizing that families across Britain would benefit from the fall in inflation. She highlighted measures like freezing rail fares and prescription fees and cutting around £150 off average energy bills in the Budget, all aimed at lowering living costs.
Inflation is measured by the Consumer Prices Index (CPI), which tracks a basket of goods and services selected by the ONS, including staples such as bread, fruit, and various clothing items.
Capital Economics’ chief UK economist, Paul Dales, described the latest figures as broadly positive, noting that the deceleration was helped by relatively pleasant “discretionary” items typical of the holiday season. He cautioned that clothing prices could rebound after Black Friday discounts fade, but overall the trend suggests disinflation is progressing faster than expected.
Hargreaves Lansdown’s Sarah Coles pointed out that Black Friday this year was unusually aggressive, helping keep clothing and footwear prices low in November. Retailers, in a bid to attract shoppers, offered deeper discounts, particularly on women’s clothing and shoes.
AJ Bell’s Danni Hewson called the inflation news a welcome relief for households preparing for Christmas. She stressed that while falling inflation is good news, it does not mean the cost of living is falling for everyone, as many families continue to feel the impact of prior price hikes.
