UK inflation fell more than expected in November, dropping to 3.2% from 3.6% in October, its lowest level in eight months. The decline was driven by slower food price rises, pre-Christmas discounts, and Black Friday promotions, strengthening the case for a Bank of England interest rate cut on Thursday.
The Office for National Statistics reported that food and drink inflation slowed from 4.9% to 4.2%, with prices for cakes, biscuits, and breakfast cereals falling. Tobacco prices also eased, and women's clothing saw a decline. Core inflation, which excludes energy and food, fell from 3.4% to 3.2%.
Analysts said a quarter-point rate cut to 4% was highly likely, with financial markets pricing in a more than 90% chance. The pound dropped 0.7% against the dollar, and government borrowing costs fell. Chancellor Rachel Reeves said the fall would be welcomed by families worried about bills.
Despite the decline, inflation remains well above the 2% target. Shadow chancellor Mel Stride noted that prices are still rising significantly above target, while the Joseph Rowntree Foundation said 7 million households cannot afford essentials this Christmas.
