Britain was given some pre-Christmas comfort today as official figures showed inflation tumbling.
The headline CPI rate dropped from 3.6 per cent in October to 3.2 per cent in November, after heavy Black Friday discounting.
That was a far bigger fall than expected, after analysts pencilled in a dip to 3.5 per cent.
Rachel Reeves hailed the number, which will further harden predictions that the Bank of England will move to cut interest rates tomorrow.
The Monetary Policy Committee is under pressure to help revive the economy, which has been stalling amid global headwinds and the Chancellor’s tax raids.
The Bank of England is tasked with keeping inflation at 2 per cent over the medium term. Higher interest rates help bring inflation down by slowing the economy.
Food and drinks, as well as alcohol and tobacco, were the biggest factors pulling on the overall rate of last month.
But in a cautionary note, core CPI – excluding energy, food, alcohol and tobacco – saw less of a slowdown, going from an annual rate of 3.4 per cent to 3.2 per cent.
ONS Chief Economist Grant Fitzner 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.
‘Tobacco prices also helped pull the rate down, with prices easing slightly this month after a large rise a year ago. The fall in the price of women’s clothing was another downward driver.
‘The increase in the cost of goods leaving factories slowed, driven by lower food inflation, while the annual cost of raw materials for businesses continued to rise.’
Ms Reeves, said: ‘I know families across Britain who are worried about bills will welcome this fall in inflation.
‘Getting bills down is my top priority. That is why I froze rail fares and prescription fees and cut £150 off average energy bills at the Budget this year.
‘The Bank of England agree this will help cut prices and expect inflation to fall faster next year as a result.’
Should the Bank of England lower interest rates even if inflation is still above target?
Go to commentsKris Hamer, Director of Insight at the British Retail Consortium, said: ‘Headline inflation eased back considerably last month, driven by extensive discounting by retailers across Black Friday month.
‘With many customers kicking off their Christmas shopping, there will have been relief to see the price of clothing and footwear fall on the year.
‘And while high labour and commodity costs have pushed up food inflation over 2025, bigger promotions ahead of Christmas helped to bring this figure down.
‘As a result, there were deals to be had, with bigger discounts seen for some meat products such as pork, lamb and chicken.’
