UK inflation dropped sharply to 3.2% in November, down from 3.6% in October and beating economists' expectations of a 3.5% decline. The Office for National Statistics released the figures, marking the lowest annual inflation rate since March.
Lower food prices drove the unexpected fall. Costs for cakes, biscuits and breakfast cereals decreased notably, despite typically rising at this time of year. Tobacco prices also eased after a large increase a year ago, while women's clothing prices fell.
Grant Fitzner, chief economist at the Office for National Statistics, said: «Inflation fell notably in November to its lowest annual rate since March. Lower food prices, which traditionally rise at this time of the year, were the main driver of the fall, with decreases seen, particularly for cakes, biscuits and breakfast cereals.»
Economic Impact
The decline means prices across the UK continue to rise, but at a slower pace than in recent months. This eases cost-of-living pressure on households.
The data comes ahead of the Bank of England's interest rate decision scheduled for Thursday. The inflation rate remains above the central bank's two percent target.
Broader Trends
The cost of goods leaving factories slowed, driven by lower food inflation. However, the annual cost of raw materials for businesses continued to rise.
Rob Wood and Elliott Jordan-Doak, economists for Pantheon Macroeconomics, pointed to «food prices falling month-on-month» as a key factor to «drag inflation down».
Food and drinks, along with alcohol and tobacco, were the most significant categories contributing to the overall downward movement in November.
Note: This article was created with Artificial Intelligence (AI).
