The UK’s inflation rate fell more sharply than anticipated in November, dropping to 3.2% from October’s 3.6%. This marks the lowest level in eight months and signals a welcome shift for consumers.
A major contributor to this decline was a noticeable dip in food prices, which actually fell between October and November—an unusual trend for this time of year. According to the Office for National Statistics, items like cakes, biscuits, and breakfast cereals led the decrease. Annually, food price inflation softened to 4.2%.
Beyond the grocery aisle, lower costs for clothing, alcohol, tobacco, and restaurant meals also helped pull the overall inflation figure down. This broad-based easing offers a tangible breather for household budgets, even though prices across the economy are still rising on average.
The data arrives just before the Bank of England’s latest interest rate decision, strengthening market expectations for a cut and fuelling hope that the worst of the price surge is over. Chancellor Rachel Reeves welcomed the news, highlighting government measures like frozen rail fares and energy bill support.
However, the picture is mixed. While inflation is cooling, prices for many staple goods remain significantly higher than a year ago. For festive shoppers, this means beef prices are up 27.7%, with chocolate, milk, and coffee also seeing double-digit increases. In contrast, the cost of olive oil, flour, and pasta has fallen.
The immediate market reaction saw the pound sterling weaken against the dollar, as traders bet on a more dovish stance from the Bank of England moving forward.
