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Inflation eases back sharply to 3.9% in November

20 Dec 2023 4 minute read
Petrol pumps at a Petrol Station PA Images Peter Byrne

UK inflation eased back to its lowest level for more than two years last month as falling petrol prices helped drive a bigger-than-expected fall, official figures show.

The Office for National Statistics (ONS) said the rate of Consumer Prices Index inflation fell to 3.9% in November, down from 4.6% in October, and the lowest level since September 2021.

Most economists had been expecting inflation to fall to 4.3% last month.

Grant Fitzner, chief economist at the ONS, said: “Inflation eased again to its lowest annual rate for over two years, but prices remain substantially above what they were before the invasion of Ukraine.

“The biggest driver for this month’s fall was a decrease in fuel prices after an increase at the same time last year.

“Food prices also pulled down inflation, as they rose much more slowly than this time last year.

“There was also a price drop for a range of household goods and the cost of second-hand cars.”

The further steep fall in inflation comes after the dramatic decline seen in October, when inflation dropped from 6.7% in September, enabling Prime Minister Rishi Sunak to declare an early victory in his goal to halve inflation by the year end.

Cold water

But the Bank of England has been quick to warn that the job of bringing inflation back to its 2% target is far from done and has poured cold water on mounting hopes of an imminent interest rate cut.

The ONS confirmed that the Bank, which held interest rates at 5.25% last week, had not seen the most recent inflation figures before its latest decision.

Chancellor Jeremy Hunt claimed the UK was “back on the path to healthy, sustainable growth” after the big fall in inflation.

Mr Hunt said: “With inflation more than halved we are starting to remove inflationary pressures from the economy.

“Alongside the business tax cuts announced in the autumn statement, this means we are back on the path to healthy, sustainable growth.

“But many families are still struggling with high prices so we will continue to prioritise measures that help with cost-of-living pressures.”

The pound fell after the inflation figures, down 0.6% at 1.27 US dollars, as the unexpectedly big decline reinforced forecasts for rate cuts in 2024.


Samuel Tombs at Pantheon Macroeconomics said: “November’s surprisingly sharp fall in CPI inflation reinforces the likelihood that the Monetary Policy Committee will begin to reduce Bank Rate in the first half of 2024, far earlier than it has been prepared to signal so far.”

He is forecasting the headline rate of CPI inflation to reach the Bank’s target of 2% in the second quarter of next year, although the Bank recently said it would take two years for inflation to come back to its goal.

The ONS figures showed that falling prices at the fuel pumps helped bring down the rate of inflation, with the average cost of petrol dropping by 4.1p a litre between October and December, to stand at 151p last month.

Overall motor fuel prices fell by 10.6% in the year to November 2023, compared with a drop of 7.6% in the year to October.

CPI was also pulled lower by a slowdown in the pace of annual food price inflation, which dropped to 9.2% last month, down from 10.1% in October, and the lowest rate since May last year.

Food prices have now fallen for eight months in a row, from an eye-watering more than 45-year high of 19.6% in March, or 19.2% including non-alcoholic drinks, which is providing some much-needed respite for cash-strapped households.

The latest data also showed a decline in the CPI measure of inflation including housing costs (CPIH) to 4.2% in November, down from 4.7% in October, while the Retail Prices Index (RPI) fell back to 5.3% from 6.1%.

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6 months ago

Rejoice folks, you are sinking further into poverty at a slower rate than last year. That’s if you believe the fudge churned out by the manipulators.

Rhddwen y Sais
6 months ago
Reply to  hdavies15

At least it is good news that inflation has fallen further than was predicted. Should bring mortgage relies to many.

6 months ago
Reply to  Rhddwen y Sais

Only if the banksters start cutting interest rates. B of E’s Fatty Bailey will try to justify his austere measures for as long as he can. They are still wedded to the fallacy that the inflation is wage driven. You only have to look back 2 years and see that the whole thing kicked off due to external factors, then retailers and bankers jumped on the bandwagon and wages only climbed as a reaction to those realities. Much of that recent history is about inflicting unnecessary pain on people.

Valerie Matthews
Valerie Matthews
6 months ago

Really? then WHY does my oil cost me double what it was 2years ago? Same Electricity! My food bill has gone from £70 a fortnight to £120 a fortnight. Everything is much more expensive! Who do they think they are kidding?

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