UK Inflation Falls to Eight-Month Low Driven by Food Price Decline
UK Consumer Price Index (CPI) inflation fell to 3.2% in November from 3.6%, marking its lowest level in eight months. The main factor driving the decline was a reduction in food prices, including drops in cakes, biscuits, and breakfast cereals. Food prices decreased by 0.2 percentage points month-on-month to 4.2% year-on-year, down from 4.9%. Other contributors to disinflation included lower prices for tobacco, restaurant meals, hotel stays, furniture, and transport.
The Bank of England is widely expected to cut interest rates following this inflation data, with a decision considered imminent. The Office for National Statistics (ONS) chief economist, Grant Fitzner, highlighted the food price declines as a key factor in the inflation fall.
Chancellor Rachel Reeves commented that families will welcome the decrease, noting Budget measures such as freezing rail fares and prescription fees, alongside a £150 average cut in energy bills. Analysts observed that the disinflation is progressing faster than expected. However, clothing and footwear prices, which were kept low in November partly due to heavier Black Friday discounts this year, could rebound as those discounts fade. Overall, the inflation trend remains downward.
