UK inflation eased more sharply than expected in November, falling to a ten-month low and increasing the likelihood that the Bank of England will deliver a fourth interest rate cut of the year.
Official figures from the Office for National Statistics (ONS) showed the consumer price index (CPI) rose by 3.2 per cent in the year to November, down from 3.6 per cent in October. The reading was below the Bank of England’s forecast of 3.4 per cent and the 3.5 per cent expected by City economists, marking the lowest inflation rate since March.
Core inflation, which strips out volatile energy and food prices and is closely watched by policymakers, also surprised on the downside, easing from 3.4 per cent to 3.2 per cent. On a monthly basis, prices fell by 0.2 per cent between October and November, signalling a renewed bout of disinflation.
Lower food prices were the biggest driver of the slowdown, according to the ONS. Monthly food prices fell by 0.2 per cent at a time of year when they typically rise, while annual food inflation eased from 4.9 per cent to 4.2 per cent. Inflation for alcohol and tobacco also dropped sharply, from 5.9 per cent to 4 per cent.
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