UK inflation dropped more than anticipated to 3.2% in November, marking the lowest rate in eight months compared to the 3.6% recorded in the previous month. Economists had forecasted a decrease to 3.5%. The Office for National Statistics (ONS) attributes this decline mainly to lower food prices.
In November, food inflation decreased from 4.9% to 4.2%, while tobacco prices and women’s clothing costs also contributed to the overall decrease in inflation. However, raw material costs for businesses continued to rise. Core inflation, excluding volatile food and energy prices, also saw a decline from 3.4% to 3.2%.
The Bank of England is set to announce its final interest rate update of the year soon, with most experts predicting a cut from 4% to 3.75%. Chancellor Rachel Reeves expressed optimism about the inflation drop, emphasizing her focus on reducing bills through various measures like freezing rail fares and prescription fees.
Inflation serves as a measure of price changes, reflecting how the cost of goods and services has evolved over time. The ONS calculates inflation based on a “basket of goods” regularly updated to represent consumer spending patterns. The central bank aims for a 2% inflation rate and uses interest rates to control inflation levels.
After peaking at 11.1% in October 2022, inflation has fluctuated due to factors such as energy and food price increases. The recent decrease to 3.2% in November 2024 indicates a positive trend, aligning with efforts to stabilize prices and boost economic confidence.