UK Inflation Falls to 3.6% in November, Offering Potential relief Ahead of Budget
London, UK – UK inflation eased for the first time in five months, falling to 3.6% in November, according to official figures released today. The drop from October‘s 4.6% offers a glimmer of hope for households grappling with a cost-of-living crisis, and potentially paves the way for further interest rate cuts by the Bank of England. However, the UK continues to experience the highest inflation rate within the G7, and rising food prices remain a significant concern.
The decline in the headline inflation rate arrives just before the Chancellor’s upcoming budget, a critical moment for the government’s economic strategy. The figures will be closely scrutinized by the Bank of England’s Monetary Policy Committee as they weigh whether to lower interest rates in December. Borrowing costs have already been cut five times since Labor came to power in July 2024, with the last reduction occurring in august.
The Office for national Statistics (ONS) reported that the easing was driven primarily by falling prices for motor fuels. Though, food price inflation unexpectedly rose, climbing from 4.5% in September to 4.9% in October, largely due to increases in the cost of bread and cereals, meat, fish, vegetables, and chocolate.
Shadow Chancellor Mel Stride commented on the figures,stating,”Inflation has been above target every single month since Labour’s last budget,leaving working people worse off.”
Economists suggest the headline inflation rate could rebound in November, but anticipate that rising unemployment and slowing wage growth will ultimately encourage the Bank of England to consider further interest rate reductions, contingent on the policies announced in the upcoming budget. Suren Thiru, economics director at the Institute of Chartered Accountants in England and Wales, noted, “Though the conditions for a December interest rate cut are falling into place, the budget is a last obstacle as rate-setters will want to gauge the affect of the policies announced before authorising another rate reduction.”
