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UK inflation Last month it declined more than expected Eat New official data shows prices are falling to ease the cost of living.
Consumer Price Index (CPI) inflation It fell to 3.2 percent in November, which was 3.6 percent in October. National Statistical Office (ONS) said – the lowest rate since March this year and a significantly larger decline than the 3.5 per cent most economists were expecting.
The most immediate impact of this data, which showed rising unemployment and a 0.1 percent decline in the economy last week, will be Interest rate cut almost certain When voters on the Monetary Policy Committee gather on Thursday.
While the Bank of England is reluctant to cut rates too sharply due to inflation still well above the 2 percent target, the unexpected fall in the CPI rate would mean its fourth interest rate cut of the year before Christmas.
Although inflation has slowed, the 3.2 percent rate still indicates growth – meaning prices are still rising, but at a slower rate than before.
Eat And beverages, as well as alcohol and tobacco, were the biggest factors pushing up the overall rate of inflation last month.
On a monthly basis, food and non-alcohol beverage prices fell 0.2 percent in November, with the biggest declines coming from bread and cereals, along with dairy, sugar, jams and chocolate.
The annual rate of inflation for the category fell to 4.2 percent in November from 4.9 percent in October.
Liquor and tobacco inflation declined sharply to 4 per cent by November from 5.9 per cent in October last year – the lowest rate in almost three years.
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The ONS also pointed to more Black Friday discounts on clothing and shoes this year, which helped push prices down 0.3 percent between October and November.
The biggest declines came in the women’s clothing category, which also includes trousers and skirts.
chancellor Rachel Reeves Reducing household bills was a “top priority” after the release of the latest inflation data.
She said: “I know that families across the UK who are worried about bills will welcome this fall in inflation.
“Reducing bills is my top priority. That’s why I froze rail fares and prescription fees and cut the average energy bill by £150.” Budget This year.
“The Bank of England agrees that this will help keep prices down and is expected to result in a sharp decline in inflation next year.”
ONS chief economist Grant Fitzner said: “Inflation in November fell to the lowest annual rate since March.
“Low food prices, which traditionally rise at this time of year, were the main reason for the decline, with shortages particularly seen for cakes, biscuits and breakfast cereals.
“Tobacco prices also helped push the rate down, with prices falling slightly this month after a big increase a year ago. A decline in the price of women’s clothing was another cause of the decline.
“Growth in the cost of goods coming out of factories slowed due to low food inflation, while the annual cost of raw materials for businesses continued to rise.”
Chris Hamer, director of insights at the British Retail Consortium (BRC), said the fall in inflation was due to “widespread discounting by retailers in the Black Friday month”.
“With many customers beginning their Christmas shopping, it will be a relief to see prices of clothing and shoes fall this year,” he said.
“And while higher labor and commodity costs have pushed up food inflation into 2025, big promotions ahead of Christmas have helped bring this figure down.
“As a result, deals had to be made at large discounts for some meat products such as pork, lamb and chicken.”
Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “Energy prices are also driving low inflation, as the energy price range increased less in October than last year, with average electricity prices rising only 2.8 per cent and gas prices rising 2.1 per cent. Budget Bringing some good news for energy bills, the removal of the charge is expected to cut costs by £150 a year from April. Given that the otherwise forecast was for an increase in the price cap in April, this will be a relief to hard bill payers.
Karen Bates, CEO of The Food and Drink Federation, said: “It is good to see that food inflation is starting to decline, not least because shoppers are filling their cupboards for the festive season. Nevertheless, food prices this Christmas remain higher than last year and many consumers are having to make tough choices about what to buy this year.
“Producers are working hard to cut costs and pass on any potential savings to consumers, but find themselves facing significant cost pressures. To really impact this persistent food inflation, we need to redouble efforts with food businesses to reduce costs such as energy and boost growth and productivity to drive prices down in the coming weeks and months across the food and beverage supply chain.”
Additional reporting by PA