Inflation slows more than expected to 3.2% as food prices ease

UK inflation slowed more than expected to 3.2% in November, marking the lowest level in eight months, as food, alcohol and clothing prices helped drive the rate down.The news comes a day ahead of the Bank of England’s expected decision on interest rates, which are expected to be cut to 3.75%, down from their current rate of 4%.

Food and non-alcoholic beverages prices rose by 4.2% in the 12 months to November, down from 4.9% in the 12 months to October,  and were the “main drive” behind the fall. 

Meanwhile, prices in the alcohol and tobacco division rose by 4.0% in the 12 months to November, down from 5.9%. The November figure was the lowest recorded since December 2022, when the rate was 3.8%. 

Clothing and footwear prices also fell, and were down by 0.6% compared with a rise of 0.3% in the 12 months to October.

Commenting on today’s inflation figures for  November, 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.”

He added: “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.”

Martin Sartorious, CBI principal economist, said: “Inflation eased more than expected in November, falling noticeably below the Bank of England’s projections. The slowdown in inflation is expected to continue next year as the impact of previous price increases in energy and utilities bills fades, according to the CBI’s latest Economic Forecast. 

“While we remain some way from the Bank of England’s 2% target, this latest data offers clearer evidence that underlying price pressures are continuing to ease. This outturn will strengthen the case for the Monetary Policy Committee to cut rates in December – despite ongoing debate within the Committee about the degree of inflationary persistence in the economy.”

Dr Kris 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.” 

He added: “While retailers are trying to offer their customers great value in the run up to Christmas, Government imposed costs including the recent packaging tax, has made this increasingly difficult. Looking ahead to next year, it is vital that Government works with industry to create a policy environment that eases the cost and regulatory burden on the industry and allows retailers to invest more in both their prices and customer experience.”